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Russia Stocks Rise With Sistema on Bashneft Sale Speculation

Russian equities rose from a week-low as billionaire Vladimir Evtushenkov’s AFK Sistema jumped on speculation OAO Rosneft, the nation’s biggest crude producer, may buy the holding’s oil unit.

The 50-stock benchmark Micex Index (INDEXCF) rose 1 percent to 1,303.60 by 10:59 a.m. in Moscow. The dollar-denominated RTS Index, which entered a bear market on June 5, surged 2 percent to 1,257.21. The Russian Volatility Index, which measures expected swings in RTS futures, tumbled 6.2 percent after surging to the highest since August yesterday.

Russian shares erased yesterday’s 0.7 percent decline as crude oil, the country’s chief export earner, added 0.1 percent to $95.28 in New York. State-run Rosneft may buy OAO Bashneft, Vedomosti reported today, citing people familiar with the matter it didn’t identify. Sistema rose as much as 9.1 percent, while preferred shares of Bashneft, in which Sistema owns about 87 percent, slid as much as 5.7 percent to a record-low 980 rubles.

Assuming a market price is paid for Bashneft, “Sistema would make a significant gain as it bought control for $2 billion,” VTB Capital analysts led by Dmitry Loukashov, said in an e-mailed note. “A substantial dividend could follow the potential sale.”

Data today may show U.S. durable-goods orders rose and house prices continued to recover, according to Bloomberg surveys of economists, adding to the Federal Reserve’s case to scale back U.S. monetary stimulus later this year.

Russian stocks slumped on June 20 after U.S. Federal Reserve Chairman Ben S. Bernanke said the regulator will probably taper its bond buying later in 2013 and halt purchases around mid-2014 if the world’s largest economy performs in line with projections.

Rosneft Rises

Rosneft’s spokesman declined to comment, while Sistema’s spokeswoman Yulia Belous said that Sistema has not received any offer from Rosneft.

Rosneft added 1 percent to 229.29 rubles. The stock jumped 2.2 percent yesterday, while the Micex fell. Rosneft signed a $270 billion oil supply deal with state-run China National Petroleum Corp.

Brent added 0.2 percent to $101.33 a barrel in London, the second day of gains. Urals crude rose 0.1 percent to $100.84.

Russia’s stocks have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The economy of the world’s biggest energy exporter grew 1.6 percent in the first three months, the slowest pace since 2009. Bank Rossii held its refinancing rate at 8.25 percent on June 10 after inflation accelerated for a second month in May to the fastest pace in 21 months.

Trading Volumes

Out of 50 stocks, 43 increased and seven dropped on the Micex. The volume of shares traded on the gauge was 29 percent below the 30-day average, while 10-day price swings dropped to 21.867.

Four stocks on the Micex closed yesterday at a 52-week low and none at highs, according to data compiled by Bloomberg. Sixteen stocks, or 32 percent, were trading above their 50-day moving average.

The Micex trades at 4.9 times its 12-month estimated earnings, having lost 12 percent this year, compared with a multiple of 9.2 for the MSCI Emerging Markets Index (RTSI$), which is down 16 percent.

The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. declined 0.8 percent to 81.75 yesterday.

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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