Russian Stocks End Two-Day Rout Led by VTB as Energy Stocks Drop

Russian stocks rose for the first time in three days as OAO VTB Bank climbed the most in a month before an MSCI Inc. decision on whether to keep the shares in its Russia index. Energy stocks declined.

The Micex Index (INDEXCF) added 0.3 percent to 1,378.98 by the close in Moscow after earlier falling as much as 0.7 percent. VTB, the nation’s second-biggest bank, rose 3.1 percent, the biggest gain July 7. OAO Lukoil retreated for a third day after Vedomosti reported that President Vladimir Putin approved a plan to increase oil-refining taxes.

MSCI said last week it would announce on Aug. 8 whether to keep VTB in its gauge tracking the country’s stocks. Speculation that MSCI won’t remove the shares may have helped fuel today’s gains, Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by e-mail.

“All eyes are on VTB,” Bit-Avragim said. Some investors “closed short positions” in the stock today, he said.

The Micex fell 1 percent last week as the U.S. and European Union expanded sanctions to Russia’s biggest lenders, including penalties that block banks including VTB from selling bonds or shares in the EU.

OAO Magnit increased 1.4 percent today after the board of Russia’s biggest food retailer recommended Aug. 1 paying a 78.3 ruble-a-share first-half dividend. OAO Mobile TeleSystems climbed 1.3 percent after its board recommended a payout of 6.20 rubles, according to a statement the same day.

Energy Taxes

Declines in energy companies curtailed gains in the Micex after Putin approved a proposal backed by the Energy and Finance ministries last week to raise oil-refining taxes, according to a report in Vedomosti today.

Putin talked Rosneft Chief Executive Officer Igor Sechin into agreeing with the plan, the paper reported. Lukoil and OAO Rosneft, the nation’s largest oil producers with a combined 19 percent weighting in the gauge, fell 0.5 percent and 0.9 percent, respectively.

“It’s highly possible that some investors have decided to switch into other sectors out of oil stocks after the news about a possible tax change,” Oleg Popov, who helps oversee $1 billion at Allianz Investments, the asset management arm of Europe’s biggest insurer, said by e-mail.

OAO Gazprom fell 1.5 percent to the lowest level since May 6. The stock was cut to hold at Sberbank CIB, which said the natural-gas company’s deliveries to Europe will be “roughly flat at best” by the end of this decade as Turkey volumes almost halve.

To contact the reporters on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Daliah Merzaban, Stephen Kirkland

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