Russian shares headed for the lowest level in a week as crude oil, the nation’s chief export earner, sank and utility shares retreated.
The Micex Index (INDEXCF) dropped 0.3 percent to 1,426.75 by 11:25 a.m. in Moscow. Trading volumes were 56 percent above the 30-day average, while 10-day price swings slumped to 11.13, the lowest since March 15. The dollar-denominated RTS Index (RTSI$) decreased 0.5 percent to 1,432.27. Federal Grid Co. dropped 2.3 percent, while OAO MRSK Holding retreated 3 percent.
Crude oil lost 0.6 percent to $96.48 a barrel, falling for the second day in New York. Russia receives about half of its budget revenue from oil and gas. Standard & Poor’s GSCI Index declined 0.3 percent to 650, the fourth day of losses.
OAO Gazprom extended declines for the third day, losing 0.3 percent to 130.47 rubles. Russia’s natural gas export monopoly is valued at less than $100 billion for the first time since 2009. Rising expenditure, declining profit and the prospect of lower-than-forecast dividends have wiped out about a third of state-run Gazprom’s market value over the past year.
Gazprom trades at 2.9 times estimated earnings, the second- cheapest stock on Russia’s 50-member Micex Index and about one- fifth of Ecopetrol SA, the Colombian oil company which trades at 14 times estimated earnings.
The RTS Volatility Index, which measures expected swings in stock futures, increased 1.7 percent today. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, declined 0.3 percent to $27.34 yesterday. The Bloomberg Russia- US Equity Index (RUS14BN) declined 0.7 percent yesterday.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times estimated earnings and has lost 3.2 percent this year, compared with 10.4 times for the MSCI Emerging Markets Index, which has slid 2.7 percent this year.
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