Russia Stock Valuations at ‘09 Low Versus Peers as Oil Tumbles

Russian stocks dropped for a fourth day, driving valuations to the cheapest level since 2009 versus peers as crude retreated and consumer shares fell amid concern global growth is faltering.

The Micex Index (INDEXCF) declined as much as 0.7 percent, before trading little changed at 1,360.75 by 11:50 a.m. in Moscow, a 13 percent retreat from this year’s high on Jan. 28. Trading volumes were 90 percent above the 30-day average, while 10-day price swings were at 15.316.

The benchmark Micex gauge is valued at 0.7 times net assets, compared with 1.5 for the MSCI Emerging Markets Index, the biggest gap since February 2009, according to data compiled by Bloomberg. The S&P GSCI Spot Index of commodities slid for the fifth day, losing 0.5 percent.

Crude, Russia’s biggest export earner, lost 1 percent to $87.82 per barrel in New York, declining for a fourth day. The Micex tumbled to a June low yesterday after China reported a slower pace of economic growth than analysts forecast, the National Bureau of Statistics said in Beijing yesterday. Russia’s economic growth is forecast to slow to 2.4 percent this year on high interest rates and lower gas exports, Economy Minister Andrei Belousov told reporters on April 12.

The dollar-denominated RTS Index (RTSI$) declined 0.5 percent to 1,359.60. Consumer goods and services stocks led declines among nine industry groups. Retailer OAO Dixy Group fell 0.5 percent to 391 rubles. OAO LSR Group (LSRG) declined 1 percent to 522.50 rubles.

Lowest Valuations

The relative strength index on the Micex was at 23.3. A value below 30 signals the index is oversold and may reverse losses.

The RTS Volatility Index, which measures expected swings in stock futures, dropped 1.9 percent to 23.73, the first drop in seven days. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 4.3 percent to $25.94 yesterday. The Bloomberg Russia-US Equity Index (RUS14BN) decreased 4.2 percent to 90.35 yesterday.

Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.1 times estimated earnings and has lost 7.9 percent this year, compared with 10.1 times for the MSCI Emerging Markets Index (MXEF), which has slid 4.8 percent this year.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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