Micex Rises to 6-Month High on Dividends as Investors Await Fed
Russian stocks jumped to the highest level in six months as investors awaited signals on U.S. stimulus and OAO Gazprom advanced after a report on the government’s dividend plan for state companies.
The Micex Index (INDEXCF) added 0.4 percent to 1,479.35 by 12:49 p.m. in Moscow, climbing for a third day. Gazprom, Russia’s natural-gas export monopoly, increased 1 percent to 147.59 rubles. OAO Sberbank, the nation’s largest lender, rose 0.8 percent to 100.15 rubles.
Russia’s Finance Ministry proposed state companies pay a minimum 35 percent of net income as dividends from 2016 based on international accounting standards, Interfax reported, citing Finance Minister Anton Siluanov. The U.S. Federal Reserve concludes a two-day policy meeting today. Among 64 economists surveyed by Bloomberg News, 33 predict it will reduce its buying of Treasuries by $5 billion or less, with 31 forecasting a cut of $10 billion or more.
“Everyone is waiting for the Fed decision, if they end up cutting stimulus more than expected, we may see strong losses,” Sergey Kucherenko, who manages about $50 million in Russian equities at OAO Nomos Bank in Moscow, said by phone. “The positive trend for stocks remains in place.”
Crude oil, Russia’s main export earner, added 1 percent to $106.48 in New York, the first day of gains in four. Reduced stimulus is already priced in by markets, 57 percent of investors surveyed in a Bloomberg Global Poll said.
The Micex advanced an average 77 percent during the Fed’s first two rounds of bond buying, and fell 0.6 percent in periods of no stimulus, the biggest difference of 46 emerging and developed markets tracked by Bloomberg.
Gazprom climbed 1.1 percent in London to $9.115, headed for the highest since March 21. Russia required state-backed companies pay at least 25 percent of net income as dividends in November, without specifying whether the payouts should be based on Russian or international accounting rules.
The reported payout proposal today is a “huge driver” for Gazprom and the “whole market,” Julian Rimmer, a trader at CF Global Trading in London, said by e-mail.
The Micex’s 14-day Relative Strength Index rose to 72.264, signaling the gauge has been overbought. The RSI measures how rapidly prices have advanced or dropped during a specified time period. Readings above 70 signal a potential retreat.
OAO Alrosa increased 3.4 percent to 34.85 rubles, the highest since Feb. 22 on a closing basis. The world’s largest diamond miner by output plans a 14 percent stake equity sale in October and will publish a so-called intention to float statement on the last day of this month, two people with direct knowledge of the matter said yesterday, asking not to be identified because the information isn’t public. Alrosa spokeswoman Jane Kozenko declined to comment by phone.
M.video, Russia’s biggest electronics retailer, dropped 1.6 percent to 273 rubles. OAO Tatneft, a regional oil producer, fell 1.1 percent to 222.42 rubles.
The Micex sank 0.7 percent on Sept. 13 as Russia’s central bank kept the refinancing rate unchanged at 8.25 percent, matching the forecast of 14 out of 22 economists in a Bloomberg survey. Russia’s economy expanded 1.2 percent in the second quarter, the Federal Statistics Service reported on Aug. 9, missing the median estimate for 2 percent.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg, with shares trading at 4.3 times 12-month estimated earnings, compared with a multiple of 10.6 for the MSCI Emerging Markets Index.
The volume of shares traded on the Micex was 30 percent above the 30-day average, while 10-day price swings slumped to 15.48, the lowest since Sept. 4.
The dollar-denominated RTS Index rose 0.2 percent to 1,442.47. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York gained 0.4 percent yesterday, while Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, was little changed.
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