Micex Fluctuates as Crude Oil Rises, Gazprom Drops on Tax Report

Russian stocks moved between gains and losses as crude climbed and OAO Gazprom slid after a report fueled bets the natural-gas export monopoly will pay more tax.

The Micex Index (INDEXCF) declined as much as 0.6 percent before trading up 0.1 percent at 1,504.52 as of 2:22 p.m. in Moscow, headed for a 1.9 percent retreat in the week. Gazprom lost 0.3 percent to 149.94 rubles. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, rose 1.9 percent to 5,025 rubles.

Crude oil, Russia’s main export earner, climbed 0.4 percent to $97.45 a barrel in New York. Russia may revise the mineral extraction tax formula for natural gas, making Gazprom pay an additional $4 billion of taxes a year, Kommersant reported, citing unidentified officials. Norilsk headed for a six-month high after the company said its board plans to discuss a possible interim dividend on Oct. 29.

“We would expect a negative market reaction” from the tax report, “especially in Gazprom,” analysts at VTB Capital in Moscow, led by Dmitry Loukashov, said in an e-mailed report.

Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the Micex trading at 4.4 times projected 12-month earnings, compared with a multiple of 10.6 for the MSCI Emerging Markets Index. Ten-day price swings on the Micex rose to 15.816 from 15.807 yesterday.

Cheap valuations are contributing to a “stealth rally” on the Micex, Julian Rimmer, a trader at CF Global Trading UK Ltd., said by e-mail from London.

Fixed-line telecom operator OAO Rostelecom led gains on the gauge on a percentage basis, climbing 3.2 percent to 114.71 rubles, extending a 4.8 percent jump yesterday.

“The rally is likely related to the expected spinoff of mobile assets,” Joseph Dayan, head of markets at BCS Financial Group in London, said in e-mailed comments. “This could be treated as a reorganization that might then be followed by an obligatory buyback.”

The RTS Index (RTSI$) dropped 0.2 percent to 1,490.34, sliding for a third day.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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