Russian equities declined as crude oil dropped and OAO Rostelecom, the nation’s state-run phone company, retreated after profit fell.
The Micex Index (INDEXCF) lost 0.3 percent to 1,402.64 by 12:40 p.m. in Moscow. Rostelecom declined 1.2 percent to 112.61 rubles. The volume of shares traded on the Micex was 38 percent below the gauge’s 30-day average, while the index’s 10-day price swings fell to 16.071.
Crude, Russia’s main export earner, declined 0.2 percent to $96.51 a barrel in New York. Rostelecom posted a 49 percent drop in net income in the first quarter from a year earlier, the company said in a statement today. Russia’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg.
“Overall, we see the results as rather weak,” Ksenia Arutyunova, an analyst at Rye, MAN & Gor Securities, who rates the stock buy, said in an e-mailed note. “We expect Rostelecom to show improvement in coming quarters.”
OAO Gazprom, Russia’s biggest company and natural gas export monopoly, fell 0.1 percent to 126.21 rubles. Gazprom’s board of directors decided today to pay 5.99 rubles a share in 2012 dividends, confirming a recommendation by the company’s management. That compares with the 8.97 rubles a share it paid in 2011.
Russia may increase dividends paid by state-controlled companies to 35 percent of profit as it seeks to boost budget revenue, three government officials with knowledge of the matter said May 8. Ten-day price swings on Gazprom tumbled to 29.761 today from 30.509.
Federal Grid Co. retreated 0.8 percent to 12.487 kopeks, falling for a second day. The grid company’s board recommended waiving its 2012 dividend, it said in a regulatory filing today.
The Micex trades at 5.2 times its 12-month estimated earnings and has lost 5 percent this year, compared with a 10.6 multiple for the MSCI Emerging Markets Index, which has dropped 0.7 percent in the period.
The dollar-denominated RTS Index (RTSI$) traded down 0.1 percent at 1,415.76. The RTS Volatility Index, which measures expected swings in stock futures, gained 1.2 percent to 20.97. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. added 0.9 percent yesterday.
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