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Micex Rises 2nd Day on Gazprom; Pares Gains on Missile Report

Russian stocks rose for a second day as OAO Gazprom, the nation’s biggest company, said net income climbed in the first quarter. Stocks pared gains after RIA Novosti reported missiles were launched in the Mediterranean.

The Micex Index (INDEXCF) added as much as 1.2 percent and traded up 0.3 percent at 1,371.89 by 1:21 p.m. in Moscow. Gazprom, which has the biggest weighting on the Micex at 16 percent, advanced 0.7 percent to 132.38 rubles. OAO Sberbank, the nation’s largest lender, gained 0.7 percent to 90.09 rubles.

Russia’s missile tracking system detected the launch of two ballistic rockets in the central Mediterranean, state-run RIA Novosti reported, citing Defense Minister Sergei Shoigu. Gazprom’s profit increased to 381 billion rubles ($11.4 billion) from 361 billion rubles in the same period a year earlier after exporting more fuel and paying less to clients for retroactive discounts than planned.

“This is a positive signal that in the future Gazprom will be able to pay less for retroactive discounts,” Alexei Kokin, an oil analyst at UralSib Financial Corp., said by phone from Moscow.

Gazprom, which sells gas under long-term contracts at prices linked to oil, renegotiated some of its agreements under pressure from European utilities that lost billions of euros after the 2008 crisis cut demand. Exports rebounded on colder weather this year after a slump last year. Gazprom’s stock increased 0.8 percent to $7.91 in London.

Crude Jumps

Brent crude jumped as much as 1.2 percent after the missile reports before trading up 0.4 percent at $114.77 a barrel. About 50 percent of Russia’s government revenue is generated by the oil and gas industries.

No one at the Defense Ministry picked up the phone when Bloomberg called. Russian Prime Minister Dmitry Medvedev’s spokeswoman, Natalya Timakova, told reporters near Moscow that Shoigu met Putin to inform him of the missile launch. Putin’s spokesman, Dmitry Peskov, declined to comment.

M.video, Russia’s biggest electronics retailer, surged 4.5 percent to 283.28 rubles. VTB Capital today raised the stock’s price estimate by 8 percent to 430 rubles and reiterated the buy recommendation, citing discount to emerging-market peers, according to today’s e-mailed note.

Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 5 times 12-month estimated earnings, compared with a multiple of 10.2 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index (RTSI$) gained 0.7 percent to 1,300.47.

The volume of shares traded on the Micex was 49 percent above the 30-day average today, while 10-day price swings climbed to 11.001, data compiled by Bloomberg show.

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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