Russian equities swung between gains and losses as the biggest companies by index weight rose, while crude oil declined.
The Micex Index (INDEXCF) added as much as 0.4 percent before trading little changed at 1,504.02 as of 12:56 p.m. in Moscow. OAO Gazprom, the natural-gas export monopoly, increased 0.5 percent to 151.91 rubles. OAO Sberbank, Russia’s biggest lender, rose 0.6 percent to 102.55 rubles. OAO Rosneft, the nation’s largest oil producer, traded up 0.2 percent.
Investors may be buying state companies’s shares on bets they will be made to pay more in dividends, according to Vladimir Bragin, head of research at Alfa Capital in Moscow. Russia’s Finance Ministry is calling on state companies to increase payouts to at least 35 percent of profit under international accounting standards from 2016. Gazprom has the biggest weighting on the Micex at 15.8 percent, while Sberbank has the second largest at 14.5 percent.
“We’re seeing investors switching into blue-chip stocks,” Bragin said by phone. “The government is pushing for higher dividends among state companies, this is a positive signal for investors in Gazprom, Rosneft, Transneft.”
Crude oil fell 0.1 percent to $103.34 in New York. Russia receives about half of its budget revenue from the oil and natural-gas industries.
The Micex has added 3.4 percent in five days. Even after the rally, Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.5 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index.
President Barack Obama said yesterday that the U.S. economy risks a “very deep recession” if Congress doesn’t raise the debt ceiling. Obama spoke after he called House Speaker John Boehner to “reiterate that he won’t negotiate on a government-funding bill or debt-limit increase,” said Brendan Buck, a Boehner spokesman.
Still, lawmakers began taking the first tentative steps toward a path to raising the limit even as the rhetoric grew more divisive. Senate Democrats are planning a test vote before the end of this week on a measure that would grant Obama authority to raise the ceiling, probably for a year, unless two-thirds of both chambers of Congress oppose.
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