Russian shares gained the most in a month as metal producers rallied after data showing China’s inflation slowed more than forecast boosted the outlook for the world’s fastest-growing major economy.
The Micex Index climbed for the first time in five days, adding 1.2 percent to 1,425.49 by the close in Moscow, the biggest gain since March 5. Trading volumes were 35 percent above the 30-day average, while 10-day price swings increased to 10.396.
OAO Novolipetsk Steel, OAO Severstal, OAO Mechel and OAO GMK Norilsk Nickel, which export their metals to China, gained more than 2 percent. The Bloomberg Base Metals 3-Month Price Commodity Index advanced 1.4 percent after data from the Beijing-based National Bureau of Statistics showed that China’s consumer price index rose 2.1 percent in March from a year earlier, below the 2.5 percent median estimate of 38 economists surveyed by Bloomberg. All metals, including nickel and steel, gained on the London Metal Exchange.
“Today’s Chinese inflation number increased demand for metal producers,” Alexander Ivanischev, head of research at Infina Investment Co. in Moscow, said by phone. “All the risks that were weighing on the Russian market in February and March have been priced in by now and the situation is turning to the bright side.”
The Russian Depositary Index added 1.3 percent to 1,644.50 today, led by Novolipetsk Steel, which rose 5.1 percent to $15.38, and Norilsk Nickel, the world’s largest producer of the metal, which climbed 3 percent to $17.08. NLMK climbed 4 percent to 47.63 rubles in Moscow, while Norilsk increased 2.6 percent to 5,304 rubles.
Mechel, Russia’s biggest coking coal producer, advanced 2.8 percent to 138.10 rubles in Moscow, and rallied 4.2 percent to $4.50 in New York.
Standard & Poor’s GSCI Index of commodities traded up 0.1 percent at 632.94. The dollar-denominated RTS Index added 1.4 percent to 1,439.46.
Crude oil, which along with natural gas accounts for about half Russia’s budget revenue, was steady at $93.23 in New York. Out of 50 stocks on the Micex, 34 rose, one was unchanged and 15 fell.
OAO Sberbank, Russia’s biggest lender, increased 2.3 percent to 102.61 rubles in Moscow. Sberbank’s depositary receipts advanced 1 percent to $12.93 in London. VTB Group, Russia’s second-biggest lender, climbed 2.3 percent to 4.90 kopeks. The shares increased 2.7 percent to $3.133 in London.
OAO Magnit, Russia’s biggest retailer by market value, rose 1.4 percent to 6,410.50 rubles, the highest price since its July 2006 listing, after Standard & Poor’s yesterday raised its credit rating by one level to BB, citing “robust” earnings growth.
OAO PhosAgro, Europe’s largest phosphate-fertilizer producer, tumbled as much as 5.7 percent, closing down 4.6 percent at 1,316.90 rubles, the biggest Micex decliner. The amount of shares traded was 22,662, equivalent to about 2.8 times the three-month average. The stock fell 4.2 percent to $14.15 in London. Phosagro’s controlling owners, Andrey Guryev and his family, are selling a 9 percent stake for the company to gain entry into the MSCI Russia index.
The Guryev family will reinvest about 45 percent of the proceeds in new shares issued by the Russian company, according to the statement.
Federal Grid Co. tumbled 4.1 percent to 13.47 kopeks. The company will become a unit of OAO Russian Grids and its shares will continue to be listed and trade on the Moscow Exchange, according to a filing yesterday. President Vladimir Putin signed a decree in November transferring 79.55 percent of Federal Grid’s shares to OAO MRSK Holding, the nation’s largest electricity distribution company.
The board of directors of Russian Grids approved issuing an additional 161 billion shares at 2.79 rubles each, which can be paid for in cash or swapped for Federal Grid shares at 28.36 kopeks each, according to yesterday’s filing. Russia will exchange the ordinary stock it holds in Federal Grid for new shares of Russian Grids, acquiring 86 percent in the new company as a result.
MRSK Holding fell as much as 4.7 percent before trading down 4 percent at 1.436 rubles.
“We do not rule out a further correction in Federal Grid shares due to the expected shift of liquidity to MRSK Holding and subsequent decrease in the weight of Federal Grid in MSCI indices,” Alfa Bank analysts said in an e-mailed note. “We also do not see clear catalysts for MRSK Holding, even at the current depressed price levels, taking into account tariff growth restrictions and its high capex needs.”
OAO Mobile TeleSystems gained as much as 1.5 percent, closing up 0.1 percent to 264.07 rubles. The depositary receipts dropped 0.4 percent to $19.695 in New York trading today. Russia’s biggest mobile provider is abandoning plans to challenge state-run VTB Group’s takeover of Tele2 AB’s local unit and will seek talks with the lender about consolidation in the industry, Chief Financial Officer Alexey Kornya said yesteday in an interview.
MTS, as the Moscow-based company is known, vowed last week to fight the buyout after Stockholm-based Tele2 rebuffed its joint bid with VimpelCom Ltd., Russia’s No. 3 mobile company, that offered a 30 percent premium to VTB’s $3.55 billion deal.
The RTS Volatility Index, which measures expected swings in stock futures, rose 2 percent today to 19.06. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, added 0.5 percent to $27.33 today. The Bloomberg Russia-US Equity Index increased 0.6 percent to 95.17 in New York today.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times estimated earnings and has lost 3.3 percent this year, compared with 10.3 times for the MSCI Emerging Markets Index, which has slid 3.9 percent this year.