Russian equities pared their first weekly drop in four as crude oil fluctuated and EON Russia, a unit of Germany’s largest utility, surged after its board recommended boosting dividends to 100 percent of profit.
The Micex gauge added less than 0.1 percent to 1,374.38 by 11:10 a.m. in Moscow, poised for a 3.7 percent fall in the week.
Crude oil, Russia’s chief export earner, swung between gains and losses before trading down 0.2 percent at $95.02 a barrel in New York. The oil and natural gas industries account for about half of Russia’s budget revenue. EON Russia jumped as much as 9.4 percent, trading up 7.5 percent at 2.7599 rubles. The company’s board recommended paying 29 kopeks a share in 2012 dividends, General Director Maxim Shirokov said today in Moscow.
“The investment case for the Russian utilities universe has now narrowed to this particular stock,” Vladimir Sklyar, an analyst at Renaissance Capital, said in an e-mailed note, reiterating a buy recommendation.
OAO Mechel (MTLR), Russia’s biggest coking-coal producer, declined 0.4 percent to 112.70 rubles, poised for the lowest since February 2009. Preferred shares sank 1.6 percent to 56.89 rubles. The American depositary receipts lost 4.4 percent to $3.52 yesterday. MSCI Inc. cut the company’s depositary receipts from its Russia Index, according to a statement on May 15.
OAO Novolipetsk Steel fell 1 percent to 45 rubles. The steelmaker’s Global Depositary Receipts slipped 4.7 percent to $14.50 yesterday as MSCI excluded the GDRs from its Russia index along with Mechel’s ADRs and OAO Russian Grids. Funds that track MSCI indexes readjust their portfolios based on the changes before the rebalancing takes effect on June 3.
VTB Group, Russia’s second-biggest lender, retreated 1 percent to 4.38 kopeks. The pre-emptive rights offering for VTB’s local shares closes today.
The volume of shares traded on the Micex was 16 percent above the gauge’s 30-day average, while the index’s 10-day price swings plunged to 12.65.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.1 times its 12-month estimated earnings and has lost 6.8 percent this year, compared with a 10.6 multiple for the MSCI Emerging Markets Index, which has dropped 1.1 percent in the period.
The dollar-denominated RTS Index (RTSI$) fell 0.2 percent to 1,378.32. The RTS Volatility Index, which measures expected swings in stock futures, added 0.1 percent to 21.72. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. slipped 1.3 percent to 92.58 yesterday. The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, tumbled 2 percent to 26.54 in New York.
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