Russia Stocks Climb as Norilsk to Rosneft Gain on Ruble Weakness

Russian stocks rose, extending this week’s advance, as export-oriented companies climbed on the weaker ruble.

The Micex Index (INDEXCF) added 0.7 percent to 1,489.48 at 3:21 p.m. in Moscow. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, gained 1.1 percent to 5,638 rubles. OAO Rosneft, the nation’s biggest oil producer, jumped 1.3 percent to 247.04 rubles. OAO Gazprom rose 1 percent.

The ruble’s slump this year is swelling exporters’ local-currency proceeds from overseas sales and bolstering profit margins. The Micex has advanced 2.4 percent this month, supported by better-than-predicted Chinese trade data and remarks by Federal Reserve Chairman Janet Yellen that the U.S. economy is improving.

“The weaker the ruble is, the better for exporters, like Norilsk, as well as for other metal producers and oil and gas companies,” Ovanes Oganisyan, a strategist at MidLincoln Research in Moscow, said by phone. “This week we’re seeing a return of investor interest for emerging markets. Yellen, Chinese data have helped improve the image of riskier assets.”

The dollar-denominated RTS Index (RTSI$) gained 1.2 percent today to 1,337.75 as the MSCI Emerging Markets Index advanced 0.9 percent. The ruble has slumped 6.2 percent against the dollar in 2014, the worst performance ater the Argentinian peso among 24 emerging-market currencies tracked by Bloomberg. It added 0.3 percent today.

Rates Meeting

OAO Severstal increased 1.4 percent to 293.30 rubles. United Co. Rusal surged 2 percent to 120.90 rubles, headed for the biggest gain since Feb. 4.

Russia’s central bank extended its interest-rate pause to 17 months and signaled for the first time that it’s prepared to tighten monetary policy if ruble weakness adds to inflation risks. The currency weakened Feb. 3 to a record against Bank Rossii’s target basket of dollars and euros, and traded little changed at 40.9188 today.

OAO Moscow Exchange rose 1.1 percent to 64.60 rubles after MSCI Inc. said yesterday it raised the stock’s weighting by 40 basis points to 0.9 percent in its Russia Index. The change takes effect from the close on Feb. 28, according to a statement on the MSCI website.

Russian equities have the cheapest valuations among 21 developing nations monitored by Bloomberg, with shares on the Micex trading at 3.2 times projected 12-month earnings, compared with a multiple of 9.2 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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