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Russian Micex Index Extends 2013 Gains as Moscow Exchange Climbs

Most Russian shares rose, extending this year’s advance, led by stocks including OAO Moscow Exchange to OAO Magnitogorsk Iron & Steel.

The Micex Index (INDEXCF) added 0.1 percent to 1,502.95 by 12:24 p.m. in Moscow, taking the 2013 increase to 1.8 percent, following gains of 5.2 percent in 2012. Of the measure’s 50 stocks, 31 rose, 18 dropped and one was unchanged. Moscow Exchange climbed 1.3 percent to 63.81 rubles, while Magnitogorsk, which has lost 29 percent this year, advanced 1.3 percent to 7.390 rubles.

The Micex is up 1.1 percent since the Federal Reserve announced plans on Dec. 18 to cut its monthly bond purchases by $10 billion to $75 billion, citing an improved outlook for the U.S. employment market. Stocks were also supported by President Vladimir Putin’s decision to pardon imprisoned former Yukos Oil Co. owner Mikhail Khodorkovsky last week.

“It’s clear that we’ll end the year at the current level,” Stanislav Kopylov, who helps manage about $3 billion at UralSib Asset Management in Moscow, said by phone. “Any strong moves are unlikely because most market players are on holidays. Perhaps Khodorkovsky’s amnesty has helped the sentiment, but the government will have to take many more steps to recover lost investor confidence.”

The Moscow bourse will shut for four days to mark the New Year holiday starting Dec. 31. The exchange will also close on Jan. 7 for Russian Orthodox Christmas. This month’s gains also came after two members of the Pussy Riot punk group were also freed this week under an amnesty signed by Putin.

Equity Outflows

Redemptions from Russia-dedicated equity funds reached $3.59 billion in 2013 through Dec. 18, the most since EPFR Global started tracking flows in 1996, the Boston-based research firm said by e-mail on Dec. 20. Russian equity funds posted $178 million in outflows in the week ended Dec. 25, Sberbank CIB said in an e-mailed note today, citing EPFR.

The dollar-denominated RTS Index (RTSI$) added 0.2 percent to 1,450.86. Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 4.5 times projected 12-month earnings, compared with a multiple of 10.5 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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