Sberbank Leads Russia Financials Lower as Energy Companies Gain

Russian stocks swung between gains and losses as OAO Sberbank sank on concern economic growth is slowing, while commodity producers rose on optimism China’s economy is stabilizing after a two-quarter slowdown.

The benchmark Micex Index erased gains of as much as 0.5 percent before trading little changed at 1,383.11 by 3:37 p.m. in Moscow. Sberbank, the nation’s biggest lender, lost 0.6 percent. Billionaire Vladimir Lisin’s OAO Novolipetsk Steel headed for the highest close since March 13, while oil and gas shares on average increased 0.5 percent.

Emerging-market stocks rose for a third day as money supply in China unexpectedly accelerated and new yuan loans exceeded estimates in July, according to official reports after the market closed on Aug. 9. Russia’s gross domestic product expanded 1.2 percent in the second quarter, below the most pessimistic forecast in a Bloomberg survey of 19 economists and less than 1.6 percent recorded in the first three months, according to Federal Statistics Service data released on Aug. 9.

“People have grasped that as the main proxy for the country’s GDP, Sberbank’s not going to show any great improvement,” Kirill Yankovskiy, a director of equity sales at UralSib Financial Corp. in Moscow, said by e-mail. It would be better to invest in oil or gas stocks than add to Sberbank as most investors are overweight on the state-run lender, he said.

Bank Rossii kept its main lending rates unchanged on Aug. 9 as inflation remained above policy makers’ target range of 5 percent to 6 percent. The central bank sees “significant” risks to growth, it said in a statement accompanying the decision.

Data last week showed China’s industrial output and exports rose more than analyst estimates. Oil in New York rose for a second day, adding 0.2 percent to $106.17 a barrel.

OAO Gazprom, the country’s largest company, added 0.8 percent to 129.20 rubles, and OAO Lukoil, the nation’s biggest non-state controlled crude producer, added 0.6 percent to 1,935 rubles. Gazprom and Lukoil have the biggest weightings in the Micex Index (INDEXCF) at about 16 percent and 14 percent, respectively.

Novolipetsk Steel advanced for a fourth day after saying earnings before interest, taxes, depreciation and amortization rose 26 percent in the second quarter from the previous three months. Coal and steel producer OAO Mechel increased for a third day, adding 0.6 percent to 99.70 rubles.

“The data confirmed the upward trend in the Chinese economy and, accordingly, increasing demand for raw materials for metallurgy and steel,” UFS Investment Co. said in a research note today.

Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 5.2 times 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index.

OAO Uralkali, the potash producer part owned by billionaire Suleiman Kerimov, fell 2.5 percent to 161 rubles, taking this year’s decline to 31 percent. Uralkali said on July 30 it would halt a venture with a Belarusian potash miner that controlled exports from the former Soviet Union, ending production restrictions that underpinned global prices and triggering a selloff in fertilizer producers’ shares.

“Fundamentally the stock is weak at the moment and can only start rising if it falls much further to begin with or if people start seeing the first supply contracts,” Yulia Bushueva, a money manager at Arbat Capital in Moscow, said by e-mail.

To contact the reporters on this story: Mark Sweetman in Moscow at msweetman@bloomberg.net; Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Mark Sweetman at msweetman@bloomberg.net

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