Russian equities rose for the first time in three days as OAO Uralkali, the world’s largest potash producer by output, surged after a 13 percent slump.
The benchmark Micex Index (INDEXCF) added 0.3 percent to 1,405.61 by 12:39 p.m. in Moscow, set for a 1.1 percent decline in the week. Uralkali gained as much as 4.3 percent, trading up 3.1 percent at 192.19 rubles, the biggest advancer. OAO Gazprom, Russia’s biggest company and natural-gas export monopoly, increased 0.8 percent to 128.92 rubles.
Russia-dedicated funds attracted $12 million in the week ended July 24, compared with $102 million in the week earlier, according to an e-mailed note from UralSib Capital, citing EPFR Global data. Uralkali lost 13 percent over four days as banks including VTB Capital and Goldman Sachs Group Inc. cut the stock’s rating. The company said July 22 it had bought about $1.3 billion of its own shares under its buyback program.
“The market fell for two days and now we’re seeing a return of investor interest for riskier assets,” Aleksei Belkin, who helps manage about $4.4 billion in assets as chief investment officer at Kapital Asset Management LLC, said in Moscow. “Uralkali dropped for several days, the stock is rebounding.”
Uralkali was poised for the Micex’s biggest weekly decline at 10 percent. In November, the company approved a one-year $1.6 billion share buyback after the stock declined.
The dollar-denominated RTS Index (RTSI$) added 0.2 percent to 1,356.57. Crude oil retreated 0.7 percent to $104.77 a barrel in New York. Russia receives about 50 percent of its budget revenue from oil and natural gas sales. Standard & Poor’s GSCI (SPGSCI) Index of commodities dropped 0.3 percent, the third day of declines.
The Micex climbed 1.7 percent last week on speculation the U.S. Federal Reserve will keep stimulus in place. Russia’s equities trade at the cheapest valuations based on estimated earnings among 21 emerging economies tracked by Bloomberg.
While Bank Rossii kept its main rates unchanged on July 12, it introduced a one-year floating-rate facility with a starting cost of 5.75 percent, compared with its 7.5 percent fixed-rate for similar-maturity loans. Russia’s economy grew 1.6 percent in the first three months, spurring calls for easing.
The volume of shares traded on the Micex was 48 percent below the 30-day average, data compiled by Bloomberg show, while 10-day price swings rose to 12.571. The 50-member Micex’s 4.5 percent decline in 2013 compares with a 2 percent increase for India’s benchmark Sensex Index and a 20 percent loss for Brazil’s Ibovespa Index. (IBOV)
The 14-day relative strength index on the Micex climbed to 60 from 58.3 yesterday. The RSI measures how rapidly prices have advanced or dropped during a specified time period. Readings below 30 indicate a security may be poised to rise, while those above 70 signal a potential drop.
The Russian Volatility Index, which measures expected swings in RTS futures, fell 3.1 percent, the sixth day of declines. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. decreased 0.7 percent to 91.63, the second day of declines.
The Micex trades at 5.3 times its 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index.
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