Russian stocks rose for a second day as Standard & Poor’s affirmed the nation’s credit rating, citing low government debt levels.
The Micex Index added 1.7 percent to 1,365.93 by the close in Moscow, paring its first quarterly loss in three to 10 percent. Power stocks climbed, with Federal Grid Co. and OAO MRSK Holding advancing on speculation the appointment of MRSK’s deputy general director as deputy energy minister will spur power-industry reforms. OAO Lukoil, Russia’s second-largest oil producer, gained after Interfax reported shareholders approved interim dividend payments.
S&P affirmed its BBB long-term foreign debt rating for Russia, the world’s biggest energy exporter, according to a statement from the company today. China may introduce “more proactive” policies to stoke growth in the world’s second-largest economy, the China Securities Journal said. Emerging-market stocks rose for a second day on expectations European leaders will take action to tame the region’s debt crisis at a meeting that starts tomorrow.
“In the absence of other positive factors, S&P’s rating confirmation is causing a short-term surge,” Sergey Ezimov, a portfolio manager at Wermuth Asset Management, which manages $270 million in assets, said by phone.
Crude oil reversed losses in New York, rising 1.1 percent. Oil and gas contribute about 50 percent of Russia’s state revenue.
MRSK, the country’s largest electricity distribution company, jumped 10 percent to 1.750 rubles, the biggest gain on the Micex and the biggest jump since August 2009. Federal Grid, the high-voltage transmission monopoly, jumped 5.5 percent to 19.28 kopeks, the most on an intraday basis since June 6.
Federal Grid has lost 39 percent this quarter and MRSK has fallen 47 percent, the worst quarterly performers on the benchmark gauge.
Former MRSK deputy director Mikhail Kurbatov said his new role in the energy ministry will make him “useful” for the industry, according to an interview with RBC Daily published today.
The Micex extended gains amid better-than-estimated U.S. data on housing and durable-goods orders.
Russian stocks trade at 5 times estimated earnings, having retreated 2.6 percent this year. That compares with a 0.3 percent drop for MSCI’s emerging-market gauge which trades at 9.4 times projected earnings.
“The two-day EU summit opening tomorrow is without doubt the most critical event in June,” VTB Capital analysts led by Alexei Zabotkin, said in an e-mailed note. “The markets are likely to remain in a holding pattern until word on the agreements, or lack thereof, emerges from Brussels.”
The Russian Depositary Index jumped 1.5 percent to 1,481.26. The dollar-denominated RTS Index gained 1.4 percent to 1,306.82.
-- Editors: Alex Nicholson, Peter Branton