Micex Declines Led by Russian Energy Shares as Inter RAO Slumps

The Micex Index (INDEXCF) retreated to a two-week low as OAO Lukoil traded without the right to its dividend payment and OAO Inter RAO UES slid the most since April.

The gauge lost 1.1 percent to 1,483.41 by the close in Moscow, the lowest since July 1. Lukoil, the nation’s second-biggest oil producer, fell 4.2 percent before adjusting for the payout and 1.4 percent after. Inter RAO slumped 3.9 percent after saying on July 11 OAO Vnesheconombank will exercise a put option the power company can’t pay for without state aid.

Lukoil has a 14 percent weighting on the gauge, the second-biggest. Some stocks have come under pressure in the past month as companies distribute dividends. Inter RAO said it may need government aid or to sell its stake in OAO Irkutskenergo to buy back 31.4 billion rubles ($918 million) of its shares from Vnesheconombank.

“Technically and psychologically, dividend cut-off dates are pressuring energy shares,” Aleksei Belkin, who helps manage about $4 billion as chief investment officer at Kapital Asset Management LLC in Moscow, said by phone.

OAO Gazprom’s dividend cutoff date is July 16, while that of OAO Surgutneftegas is July 15, according to data compiled by Bloomberg. Surgutneftegas fell 1.9 percent, while Gazprom retreated 0.4 percent. The dollar-denominated RTS Index (RTSI$) lost 1.5 percent to 1,361.89.

TMK Gains

“Bad news for Inter RAO from the VEB option is another unexpected factor that leads to stock downgrades,” Slava Smolyaninov, an equity strategist at UralSib Capital in Moscow, said in e-mailed comments.

On July 11, the gauge entered a bullish technical formation known as the golden cross, which occurs when a security’s short-term moving average breaks above its long-term moving average. The index’s 50-day moving average rose to 1,448.94, above the 200-day moving average of 1,444.24, data compiled by Bloomberg show.

OAO TMK, the world’s largest pipe producer by output, gained as much as 2 percent before closing up 0.6 percent to 83.99 rubles. The stock is rising after a U.S. ruling to impose duties on steel pipe imports, which didn’t include Russia, according to Moscow-based Deutsche Bank AG analyst George Buzhenitsa.

“The final determination is an important positive development for the North American pipe producers,” Buzhenitsa said in an e-mailed note. The ruling is “one of the key drivers for TMK, given the importance of the American business for the company’s margins recovery and free cash flow profile,”

OAO Magnit, the nation’s biggest food retailer, added 0.6 percent to a record high, rising for the sixth day. OAO Dixy Group advanced 0.5 percent.

Retail Stocks

Retail stocks are gaining on “good operational results-- rising sales against the backdrop of food inflation,” Anton Kravchenko, a portfolio manager at Raiffeisen Capital in Moscow, said by e-mail. The shares are also rising on expectations of “good” financial results, he said. Magnit is scheduled to publish earnings on July 23.

OAO Mechel, the nation’s biggest coking coal producer, climbed as much as 8.1 percent before trading up 2.6 percent at 39.5 rubles. The stock had lost 25 percent in the previous four trading days. Chief Executive Officer Oleg Korzhov on July 11 said the company’s bankruptcy isn’t in anyone’s interest and called for a compromise and a restructuring of its debts.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

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

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