Russian equities advanced for the first time in three days as VTB Group, the country’s second- largest lender, approved a share sale and oil producer OAO Surgutneftegas rallied before filing under international financial reporting standards for the first time since 2001.
The Micex Index (INDEXCF) added 0.4 percent to 1,377.53 by 11:01 a.m. in Moscow, after increasing 2.5 percent last week. Surgut’s preferred shares gained as much as 2.7 percent, the biggest advance on the Micex, while its ordinary shares traded up 1.9 percent at 28.611 rubles.
VTB Group gained 3.1 percent to 4.68 kopeks. The lender’s supervisory board approved issuance of 2.5 trillion new ordinary shares at 4.1 kopeks each, according to an April 26 statement released after the market closed. Norwegian, Qatari and Azeri wealth funds will buy stock in the placement, the company said today. Surgutneftegas will report earnings in line with IFRS tomorrow, according to an April 24 statement.
“The VTB share sale news is very good because they managed to secure serious investors, including the Norwegian wealth fund,” Mark Rubinstein, head of research at IFC Metropol, said by phone from Moscow. “The market is tough and the fact that they managed to sell everything is positive.”
The Russian government controls 75.5 percent of the shares in VTB and its stake will drop to 60.9 percent as a result of the additional sale, according to today’s statement.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The measure trades at 5.1 times its 12-month estimated earnings and has lost 6.7 percent this year, compared with a 10.3 multiple for the MSCI Emerging Markets Index, which has dropped 2.9 percent in the period.
The number of shares traded on the Micex was 1.1 times above its 30-day average, while the gauge’s 10-day price swings subsided to 17.072. The dollar-denominated RTS Index (RTSI$) gained 0.4 percent to 1,387.23.
The RTS Volatility Index, which measures expected swings in stock futures, added 3.1 percent to 21.22. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, declined 0.3 percent to 26.29 on April 26, while the Bloomberg Russia-US Equity Index retreated 1.1 percent to 92.53.
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