Russian shares dropped for the first time in three days as OAO GMK Norilsk Nickel, Russia’s biggest miner, tumbled along with the metal.
The Micex Index fell 0.7 percent to 1,511.40 by the close of trading in Moscow, with 8 securities up and 42 down. The dollar-denominated RTS Index declined 0.6 percent to 1,582.63. Industrial shares lost 3.2 percent on average.
Norilsk, which has the fifth-largest weighting on the Micex at 5.2 percent, retreated 2 percent as nickel dropped in London. Russian equities, which have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg, have slid 3.3 percent from a 10-month high on Jan. 28. OAO Mostotrest, the bridge and road builder part-owned by Prime Minister Vladimir Putin’s judo partner Arkady Rotenberg, slumped 5.1 percent to the lowest since October 2011.
“The Micex reached its peak in January and there isn’t enough demand from investors to push it higher in the near term,” Sergey Fundobny, head of research at Arbat Capital in Moscow, said by phone.
OAO Rostelecom rose as much as 3.6 percent, the second-biggest gainer on the index, as Vedomosti reported that Konstantin Malofeev, founder of Marshall Capital, which controls 10.5 percent of Russia’s state-run telephone operator, is in talks with billionaire Mikhail Prokhorov’s Onexim Group about selling the percent stake. Marshall Capital declined to comment on the talks, spokeswoman Julia Emm said by phone. The shares closed up 1.9 percent at 121.80 rubles.
VTB Group, Russia’s second-largest lender, rose to a three-week high after central bank Chairman Sergey Ignatiev supported the sale of additional shares by the bank without state participation. The stock closed 0.8 percent up at 5.69 kopeks. VTB’s depositary receipts were the second-biggest gainer on the Russian Depositary Index with a 0.4 percent advance.
OAO Alrosa, the world’s largest diamond miner by output, surged 5.7 percent to 34.21 rubles, the highest level since December 2011 and the biggest gainer on the index. Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. were chosen to compete to handle the government’s sale of a stake, according to a Feb. 18 statement.
OAO RusHydro declined 0.9 percent to 70.02 kopeks, the lowest level since March 2009, as the company filed a claim with Russian investigators on alleged embezzlement of funds for the construction of the Zagorskaya power plant, the Interior Ministry said in a statement today. Putin said on Feb. 13 RusHydro needs to investigate the disappearance of “billions of rubles” during construction.
Ten-day price swings on the Micex rose to 14.355, while the number of shares traded on the gauge was 33 percent above the measure’s 10-day average, data compiled by Bloomberg show. The ruble was little changed against the dollar at 30.0865.
Oil, Russia’s main export earner, was steady at $96.65 a barrel. Russia receives about half of its budget revenue from oil and natural gas. Standard & Poor’s GSCI Index retreated 0.5 percent to 672.38 as metals declined in London.
The Micex trades at about 5.7 times estimated earnings and has added 2.5 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which has gained 1.5 percent over the same period.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, rose 0.9 percent to $30.26 yesterday. The RTS Volatility Index, which measures expected swings in futures, slipped 1 percent to 20.08 points. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. rose 0.5 percent.