Russian stocks rose for the first time in three days as OAO Sberbank surged to a two-year high on speculation Bank Rossii will cut rates.
The Micex Index gained 0.2 percent to 1,546.76 by the close in Moscow, extending this month’s gain to 4.9 percent. Of 50 stocks, 24 dropped and 26 gained. The dollar-denominated RTS Index added 0.2 percent to 1,622.13. The Micex’s 50-day volatility fell to 12.231, the lowest level in at least 10 years. Sberbank surged as much as 1.8 percent, rising to the highest level since January 2011.
Rising interest rates will “inevitably” affect lending and may curb Russia’s economic expansion, President Vladimir Putin told a government meeting today. Russia’s central bank is resisting calls to cut key rates, sparking a “huge argument” with the government over priorities, First Deputy Prime Minister Igor Shuvalov said in a Jan. 18 interview. Bank Rossii left borrowing costs unchanged this month after unexpectedly raising them in September.
“The prospect of interest rates falling, as ordered, seemingly, by the president” made Sberbank “the market leader,” Julian Rimmer, a trader of Russian and Turkish stocks at CF Global Trading in London, said by e-mail.
The Russian Depositary index added 0.5 percent, with Sberbank’s depositary receipts surging 2.9 percent, the biggest gainer.
The extra amount investors pay to hold the London-traded securities surged to 18 cents, the highest since Jan. 7, when Moscow trading was closed for public holidays. The last time the premium was larger than today’s level when both exchanges were open was on Nov. 23. The amount of shares traded was about 64 million, equivalent to four times the three-month average.
Russia’s biggest lender said its depositary receipts program is close to the limit, according to a website statement. The receipts can only account for 25 percent of a company’s shares and 50 percent of its listed shares, according to Russian regulations. Sberbank’s depositary receipts are equivalent to four ordinary shares.
Russian stocks reversed losses after U.S. data showed consumer spending climbed in December as incomes grew by the most in eight years. M. Video, Russia’s biggest electronics retailer, jumped 2.2 percent to 265.02 rubles. OAO Aeroflot, Russia’s biggest airline carrier, rose 2.5 percent to 53.53 rubles.
The number of shares traded on the Micex was 18 percent above the 10-day average, data compiled by Bloomberg show. Standard & Poor’s GSCI Index of commodities declined 0.4 percent to 673.16 after rising 0.8 percent yesterday. Metals gained in London, including lead, nickel and tin.
Russia’s economy expanded 3.4 percent in 2012, down from 4.3 percent a year earlier, the Federal Statistics Service in Moscow said in an e-mailed statement today. That missed the 3.6 percent median forecast of 18 analysts in a Bloomberg survey and the Economy Ministry’s estimate of 3.5 percent.
VTB Group dropped 0.7 percent to 5.56 kopeks, the lowest level since Jan. 10.
Russia’s second-biggest lender is ready for the “challenge” of a share sale primarily in Moscow after Putin proposed that most offerings for state-controlled companies be held on Russian bourses, RIA Novosti reported, citing VTB CEO Andrey Kostin.
OAO RusHydro declined 2.5 percent to 75.58 kopeks, the biggest decliner on the Micex. VTB Capital cut the stock to sell and reduced its price estimate as Russia’s state-run hydropower producer proposed creating a holding to modernize Russia’s water sewage system.
Crude oil, Russia’s main export, retreated for the first time in four days as claims for U.S. unemployment benefits increased more than forecast last week, losing 0.8 percent to $97.15 in New York. Russia gets about half of its budget revenue from oil and natural gas.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 1.2 percent to $30.59 yesterday. The RTS Volatility Index, which measures expected swings in the stock futures, dropped 0.7 percent to 20.86.
The Micex trades at about 5.7 times estimated earnings and has added 4.9 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which has gained 1.2 percent over the same period.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.