Russia’s benchmark equities gauge dropped for a second day as crude sank and concern the global recovery will founder curbed appetite for riskier assets.
The Micex Index fell 0.8 percent to 1,473.54 in Moscow and closed down 1.5 percent in the week. OAO Rosneft, Russia’s biggest oil producer, slipped 1.3 percent, its fifth day of losses. OAO Novatek, the second-largest natural-gas company, retreated 3.4 percent. OAO Rostelecom, the country’s dominant fixed-line phone operator, rallied for a third day.
Oil, Russia’s main export, slid to the lowest this year, dropping as much as 1.8 percent to $90.44 a barrel in New York. China’s manufacturing slowed for a second month, while the U.S. Senate rejected a pair of partisan proposals to replace automatic across-the-board spending reductions which the International Monetary Fund says will hurt global growth.
“Weaker commodity prices are undermining a large percentage of the market capitalization,” Julian Rimmer, who trades Russian and Turkish stocks at CF Global Trading in London, said by e-mail. “The negative mindset among Russian investors is well-entrenched.”
The dollar-denominated RTS Index sank 1.6 percent to 1,509.80. Thirty-day price swings on the Micex climbed to 11.888, with the number of shares traded on the gauge 1.2 percent below the measure’s 30-day average, data compiled by Bloomberg show. The ruble weakend 0.7 percent to 30.76 against the dollar.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg. The Micex trades at about 5.6 times estimated earnings and has dropped 0.1 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which is down 0.4 percent in the same period.
Rostelecom added 1.7 percent to 124.96 rubles in Moscow, extending yesterday’s 4.8 percent increase. The shares jumped after Marshall Capital Partners sold its 10.7 percent stake to President Vladimir Putin’s former judo partner, billionaire Arkady Rotenberg.
“Risks associated with Marshall Capital are gone and the stock is rallying,” Sergey Libin, an analyst at ZAO Raiffeisenbank who rates Rostelecom hold, said by phone from Moscow yesterday. “Rotenberg is loyal to the government and is good news for the company as a shareholder.”
Rostelecom’s Moscow shares sank 21 percent in 2012, the steepest drop in three years, as Russia’s Interior Ministry said in November it’s probing allegations of embezzlement surrounding “certain individuals” involved with the company.
American depositary receipts of Rostelecom jumped 5.7 percent to $24.25 yesterday, the biggest gain since Sept. 21. The company settled at a 0.6 percent premium yesterday versus the Moscow-listed shares, the widest gap since Feb. 21. One ADR equals six shares.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, fell 0.8 percent to $28.61. The RTS Volatility Index, which measures expected swings in the index futures, added 3.4 percent to 22.34. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. fell 0.9 percent today.
Crude oil for April delivery slipped 1.6 percent to $90.61 on the New York Mercantile Exchange today, after gross domestic product in the U.S. grew at a slower-than-expected 0.1 percent annual rate. Oil fell 5.6 percent in February, the first monthly decline since October.