Russian equities fell for a fourth day as the ruble slumped to its lowest level in five years, helping push shares in OAO Sberbank lower.
The Micex Index (INDEXCF) lost 0.4 percent to 1,489.31 by 12:49 p.m. in Moscow. Sberbank, the nation’s biggest lender with a 13 percent weighting on the benchmark gauge, fell 1.1 percent to 98.55 rubles. OAO Dixy Group, a retailer, declined 1.3 percent to 350.57 rubles.
The ruble slid 0.7 percent to 34.7675 per dollar, the weakest intraday level since March 2009, as predictions of further Federal Reserve stimulus cuts fueled the worst selloff in developing-nation currencies in five years. A weaker ruble encourages Russians to withdraw and convert local-currency deposits, Sberbank’s main source of funding, while hurting retailers by making imports more expensive in ruble-denominated prices. The Fed next meets Jan. 28-29.
“For banks, the situation with the weakening ruble isn’t good, their main clients are getting hurt,” Vladimir Bragin, head of research at Alfa Capital in Moscow, where he helps manage $2.9 billion, said by phone. “One must be careful about retail stocks right now, we shouldn’t expect any star results.”
Russia’s December unemployment rose to 5.6 percent from 5.4 percent, more than forecast to an eight-month high, the Federal Statistics Service said in an e-mailed statement on Jan. 24.
“Rising unemployment and the ruble’s slump will hit the consumer,” Bragin said.
OAO Magnit, the nation’s biggest food retailer, dropped 0.8 percent to 8,193.70 rubles after earlier rising as much as 4.1 percent. The stock sank 1.2 percent to $53.10 in London. Magnit posted a record profit margin in the fourth quarter as it secured more favorable purchasing terms from suppliers and curbed costs amid slowing sales growth.
VTB Group, Russia’s second-largest lender, retreated 1.3 percent to 4.62 kopeks. The stock dropped 1.9 percent to $2.61 in London. AFK Sistema slumped 6.8 percent to 40.651 rubles.
Crude oil, the nation’s biggest export earner, gained 0.3 percent to $96.95. Brent crude declined 0.4 percent to $107.49. Russia receives about half of its budget revenue from oil and natural gas sales.
Russia-dedicated stock funds posted $15 million in outflows in the week ended Jan. 22, UralSib Capital said in an e-mailed note on Jan. 24, citing EPFR Global data.
The dollar-denominated RTS Index (RTSI$) fell 1.3 percent to 1,346.26.
Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 3.3 times projected 12-month earnings, compared with a multiple of 9 for the MSCI Emerging Markets Index.
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