Micex Pares First Weekly Gain in 3 on Ex-Dividend Stocks, Oil

Russian stocks declined, paring the main equity index’s first weekly gain in three, as declining oil prices hurt energy companies and as OAO Mobile Telesystems and E.ON Russia went ex-dividend.

The Micex Index (INDEXCF) retreated 1.7 percent to 1,489.53 by the close in Moscow, trimming the advance this week to 0.8 percent. Thirty-seven of 50 stocks on the bourse dropped with energy shares losing 1.6 percent on average. Mobile Telesystems and E.ON Russia fell 7.9 percent and 9.2 percent, respectively, on their ex-dividend date, taking about 6.4 points out of the bourse’s performance. Excluding the payout, MTS shares fell 2.3 percent while those of E.ON Russia rose 4.5 percent.

The index has rallied 20 percent from this year’s trough on March 14, the last trading day before Crimea’s referendum on joining Russia. The rebound was helped by gains in global peers as the MSCI Emerging Markets index climbed 6 percent this year. Optimism was also boosted this week by talks between Ukraine and Russia. The foreign ministers of Germany, France, Ukraine and Russia agreed to work for a comprehensive cease-fire in another round of talks by tomorrow.

“Russia is pulled up by the continuing rally in the emerging-markets space,” Joseph Dayan, head of markets at BCS Financial Group in London, said in e-mailed comments. “At the same time, it’s held back by the falling oil price and persistent risks about the Ukraine crisis, which still doesn’t look close to quick and easy resolution.”

Brent oil, which with gas comprises half Russia’s revenue, traded down 0.3 percent at $110.66 per barrel in London after falling to the lowest in three weeks.

Equity Outflows

OAO Bashneft ordinary shares fell 2.4 percent to 2,470 rubles. The oil company controlled by the AFK Sistema holding asked shareholders to approve on Aug. 14 the placement of an additional 37 million ordinary shares and appoint Morgan Stanley, Barclays Plc ZAO and Sberbank CIB as underwriters for the offering.

The Micex trades at 5.4 times estimated earnings, the cheapest among 21 emerging markets tracked by Bloomberg. That compares with a multiple of 5.3 percent at the end of February before Russia’s incursion in Crimea. The dollar-denominated RTS Index (RTSI$) declined 2.2 percent to 1,360.48 today.

OAO Rosneft tumbled 1.5 percent to 253.90 rubles. The oil producer will go ex-dividend on July 7, according to data compiled by Bloomberg. OAO Gazprom, the nation’s biggest natural gas producer, retreated 2.1 percent to 149.13 rubles.

“The market is looking for new drivers, it’s consolidating after earlier gains,” Andrey Verkholantsev, head of research at Kapital Asset Management LLC in Moscow, said by phone. “Stocks trading ex-dividend are technically negative and weigh on the index.”

Russia-focused equity funds had $34 million in outflows in the five days ending July 2, UralSib Capital said in an e-mailed note today, citing EPFR Global data. It was the second consecutive week of outflows and the second-biggest in almost two months, the note said.

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

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Chris Kirkham, Zahra Hankir

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