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Russia Stocks Climb as China Data Boosts Commodity Producers

Russian stocks advanced after China’s manufacturing beat estimates, boosting appetite for commodity producer shares.

The Micex Index (INDEXCF) climbed 0.5 percent to 1,486.07 by 11:22 a.m. in Moscow, with 37 stocks up and 13 down. Regional oil producer OAO Tatneft added 1.5 percent to 205.92 rubles. Steelmaker OAO Severstal jumped 1.1 percent to 304.80 rubles, while OAO Novorossiysk Commercial Sea Port gained 1.4 percent to 3.0410 rubles.

Chinese manufacturing growth beat analyst estimates in November, indicating the nation’s economic recovery is sustaining momentum. Russian stocks lost 2 percent last month amid concern an economic recovery in the world’s biggest energy exporter is foundering.

“Our market is being supported by the good Chinese data,” Dmitry Mikhailov, a money manager at Alfa Capital Partners Ltd. in Moscow, where he helps manage about $3 billion, said by phone. “It’s no secret that the Russian economy is based on commodity exports and China dominates imports of commodities.”

China’s Purchasing Managers’ Index of manufacturing activity was 51.4 last month, according to government data released yesterday, exceeding 24 out 26 estimates in a Bloomberg News survey. A separate gauge from HSBC Holdings Plc and Markit Economics today was 50.8, topping all 13 analysts’ projections.

Federal Grid

OAO Aeroflot, Russia’s biggest airline, jumped as much as 7 percent before trading up 2.9 percent at 62.25 rubles. Third-quarter net income rose 88 percent to $544 million from a year earlier, the company said today.

Federal Grid Co. increased 1.9 percent to 8.10 kopeks. The company has proposed cutting its 2014-2016 investment program by 43 percent to 267 billion rubles ($8.1 billion), Vedomosti reported, citing a copy of presentation for a government meeting last week.

Russia’s growth will probably miss the government’s 1.8 percent goal in 2013, a pace that would mark the weakest expansion since the recession in 2009, Economy Minister Alexei Ulyukayev said Nov. 13. Russia-dedicated equity fund outflows are set for the worst year on record, with redemptions reaching more than $130 million in the week ended Nov. 27, according to a Nov. 29 UralSib Capital note.

The RTS Index (RTSI$) rose 0.6 percent to 1,411.62. Russia’s equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the benchmark trading at 4.3 times projected 12-month earnings, compared with a multiple of 10.7 for the MSCI Emerging Markets Index.

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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