Russian stocks rose for the first time in four days as OAO Uralkali, the world’s biggest potash producer, rallied after billionaire Mikhail Prokhorov’s Onexim Group was said to be among potential bidders for a stake.
The Micex added 1 percent to 1,479.59 by the close in Moscow after earlier dropping as much as 0.4 percent. Uralkali rose 2.1 percent to 174.65 rubles and 1.4 percent to $27.10 in London. AFK Sistema advanced 2.7 percent to 33.694 rubles, the highest since April 2011.
Prokhorov, who sold his 38 percent of Polyus Gold International Ltd. to associates of billionaire Uralkali shareholder Suleiman Kerimov in February, hasn’t made a formal offer, three people with direct knowledge of the matter said, asking not to be identified as the information is private. Kerimov is seeking a price for the Uralkali stake based on a market value of more than $20 billion for the company as a whole, they said. That would be at least a 28 percent premium to today’s share price.
“This isn’t the first report we’ve heard about a potential bid for Kerimov’s stake,” Denis Vorchik, an analyst at UralSib Capital, said by phone from Moscow.
Russian entrepreneur Vladimir Kogan is also said to be seeking a stake in the company, according to people familiar with the situation. Kerimov, who controls 33 percent in Uralkali with two business partners, began receiving offers from potential buyers after Belarus arrested Uralkali Chief Executive Officer Vladislav Baumgertner on Aug. 26, a month after he pulled out of the Belaruskali trading venture with the east European country that controlled 40 percent of the global exports of the crop nutrient.
“The market is hoping that if the ownership structure is changed, Uralkali will renew its cartel with Belaruskali and there’ll be better control over the potash price,” Vorchik said. “In reality, potash prices are unlikely to recover for some time now.”
Crude added as much as 0.8 percent to $103.96 in New York today, the first gain in five days. Russia receives about half of its budget revenue from the oil and natural-gas industries. OAO Surgutneftegas, an oil producer, climbed 3 percent to 28.42 rubles, the biggest advancer. Surgutneftegas increased 2.1 percent to $8.81 in London.
Polymetal International Plc (POLY), a Russian gold and silver miner, tumbled 0.7 percent to 344.55 rubles. OAO Moscow Exchange slumped 4.3 percent to 60.50 rubles, the biggest decliner.
OAO Sberbank, Russia’s biggest lender, added 1.5 percent to 101.95 rubles. Sberbank climbed 0.6 percent to $12.64 in London.
The Micex fell earlier after World Bank cut its forecast for Russia’s economic growth to 1.8 percent from 2.3 percent in 2013 and reduced it to 3.1 percent from 3.6 percent next year, according to a report. Russia should avoid higher budget spending in the coming years and refrain from easing monetary policy to keep inflation under control, the International Monetary Fund said in a report yesterday, reducing its prediction for the pace of expansion in 2013 to 1.5 percent from 2.5 percent.
“Russia is trying to stick its finger into one hole and the others start leaking,” Alexei Yazikov, head of research at Aton Capital LLC, said by phone from Moscow. “It’s impossible to diversify Russia’s economy quickly, it would take years. Cutting rates is useless, it’s like offering help to a dead man.”
Russia should focus on supporting startup companies instead of small and medium-sized businesses to diversify the economy, the World Bank said. The comments feed into a government debate over how to steer the $2 trillion economy out of its sharpest slowdown since 2009, with the central bank spurning calls by senior officials for lower borrowing costs by holding its main lending rates for a year.
The Micex (INDEXCF) 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. The nation’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 growth.
Gross domestic product will rise 1.8 percent this year, the Economy Ministry said last month, trimming its April forecast for a 2.4 percent advance.
Average trading volume on the Micex was about 19 percent below the 30-day average today, data compiled by Bloomberg show. Ten-day price swings rose to 16.817. The dollar-denominated RTS Index increased 0.5 percent to 1,452.98.
The country’s stocks jumped last week after the U.S. Federal Reserve unexpectedly decided against reducing monetary stimulus.
Even after last week’s 2.5 percent rally, Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg. The Micex Index’s 12-month estimated price-to-earnings ratio was at 4.4 today, compared with a multiple of 10.5 for the MSCI Emerging Markets Index.
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