Russian shares rebounded from last week’s drop as crude oil, the nation’s chief export earner, rose and power stocks advanced.
The Micex Index (INDEXCF) gained 0.8 percent to 1,427.29 by 10:58 a.m. in Moscow after a 1.5 percent retreat last week. Trading volumes were 75 percent above the 30-day average, while 10-day price swings climbed to 9.112. The dollar-denominated RTS Index (RTSI$) added 1 percent to 1,424.43.
Crude oil climbed 0.3 percent to $93.01 in New York, the first advance in four days. Russia receives about half its budget revenue from oil and natural gas. Out of 50 stocks on the Micex, 42 rose and 8 fell. OAO MRSK Holding, the nation’s largest electricity distribution company, jumped as much as 3.4 percent, rising 1.9 percent to 1.547 rubles, as the board of directors decided to set its additional share issuance price at 2.79 rubles. OAO Bashneft, an oil producer, surged 3.1 percent to 1,979.90 rubles.
After three weekly declines “we expect Russia to try consolidate,” Farhan Kazmi, the head of emerging-market equities at Credit Suisse Group AG in Moscow, said by e-mail. Oil gains are “helpful,” he said.
Oil producer OAO Lukoil increased 0.9 percent to 1,953.4 rubles, after Goldman Sachs Group Inc. raised the stock to buy on 2013 dividend increase prospects and added the company to its emerging-market focus list, according to an e-mailed note.
OAO Rosneft, Russia’s largest oil producer, added 0.6 percent to 232.13 rubles. Goldman reinstated the stock at neutral, citing no catalysts for further re-rating. OAO Gazprom, the natural-gas export monopoly, increased 1.1 percent to 131.89 rubles. Goldman Sachs cut the stock to neutral from buy, saying increased dividends are “not likely” as 2012 profit fell 37 percent based on domestic accounting standards.
OAO Novatek, Russia’s second-biggest natural gas producer, added 0.5 percent to 317.22 rubles. Goldman maintained the stock at buy, calling the company the “most attractive” opportunity in the Russian energy industry on asset base, “strong” execution track record, growth profile,“high” returns.
The RTS Volatility Index, which measures expected swings in stock futures, rose 4.8 percent today. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, fell 0.3 percent to $26.98 on April 5. The Bloomberg Russia-US Equity Index (RUS14BN) slid 0.2 percent to 94.54 in New York on April 5.
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 3.9 percent this year, compared with 10.5 times for the MSCI Emerging Markets Index, which has slid 4.6 percent this year.
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