April 11 (Bloomberg) -- Russian shares tumbled to a November low, falling 10 percent from the highest level this year as OAO Gazprom slumped and crude oil, the country’s main export earner, halted its advance.
The Micex Index retreated 1.7 percent to 1,401.73 by the close in Moscow, the lowest level since Nov. 29 and a 10 percent drop from this year’s high on Jan. 28. Trading volumes were 11 percent above the 30-day average, while 10-day price swings rose to 12.62, the most since March 28. OAO Mechel, a coking coal and steel producer, fell 5.7 percent, the most since June 22, to 139.80 rubles. Metal producers OAO Magnitogorsk Iron & Steel, OAO Severstal and OAO Novolipetsk Steel slid at least 1.2 percent.
Crude oil, which together with natural gas accounts for about half Russia’s budget revenue, retreated 0.5 percent to $94.19 per barrel in New York. Most metals dropped in London, including steel, zinc and lead. Gazprom, Russia’s biggest company and natural-gas export monopoly, lost 2.6 percent to 126.05 rubles, the lowest level since March 2009, as the management recommended paying dividends 33 percent below last year’s level. The stock has the third-biggest weighting on the Micex at 14.6 percent.
“Investors are cutting their Russian holdings,” Mark Rubinstein, head of research at Metropol IFC in Moscow, said by phone. “Gazprom is dragging the whole index down, the company isn’t forecasting good dividends. Metals are down and metal producers are slumping.”
Gazprom’s management recommended paying 5.99 rubles a share in 2012 dividends, company spokesman Sergei Kupriyanov said by phone. Gazprom’s 2012 net fell 37 percent from a year earlier, according to results based on Russian accounting standards on March 27.
The dollar-denominated RTS Index sank 1.4 percent to 1,433.08.
The Relative Strength Index on the Micex was about 32. A value below 30 signals the index has been oversold and may reverse losses.
Local stocks fell the most since Nov. 13 on March 18 on concern Cyprus’s plan to rescue its economy through a tax on savings accounts may affect $60 billion of loans and deposits from Russia. Cyprus is the biggest direct investor into Russia and the chief recipient of Russian investment abroad because of a double-tax avoidance treaty and low tax rates, according to Russia’s central bank.
Metal producers led the retreat in London as the Russian Depositary Index dropped 1.1 percent. OAO GMK Norilsk Nickel’s depositary receipts tumbled 2.4 percent to $16.76 in London, falling 2.4 percent to 5,190 rubles in Moscow. Severstal lost 3.1 percent to $8.37.
OAO Rosneft dropped 1.9 percent to 221.66 rubles, the lowest since Oct. 22. Russia is considering selling a 19-percent stake in the nation’s biggest oil producer this year, Economy Minister Andrei Belousov told reporters today.
Russia plans to raise 427 billion rubles ($14 billion) this year in asset sales to help balance the budget, Finance Minister Anton Siluanov said in March. A 19 percent stake would be equal to $14.4 billion based on a $75.6 billion market capitalization.
OAO Rostelecom, the country’s biggest fixed-line phone operator, fell as much as 1 percent before closing down 0.7 percent at 115.25 rubles. Konstantin Malofeev’s Marshall Capital Partner annuled the sale of its 11 percent stake in Rostelecom to billionaire Arkady Rotenberg, according to a statement yesterday. Rotenberg’s company agreed to buy the shares from Marshall for an undisclosed amount in February.
“The loss of an influential shareholder such as Rotenberg may cause a negative market reaction,” Alfa Bank analysts Elina Kulieva and Dmitry Doronin said in an e-mailed note today.
At the same time, the cancelation of the deal “may reduce fears that Rostelecom will use non-market methods when expanding into the mobile segment,” the Alfa Bank analysts said. That would be “positive for MTS, VimpelCom and MegaFon.”
OAO Mobile TeleSystems was the biggest gainer on the Micex, closing up 0.9 percent at 268.39 rubles.
OAO RusHydro declined 4.6 percent to 51.26 kopeks, the lowest since January 2009. The depositary receipts closed down 5.6 percent to $1.616 in London, a record low since its listing in July 2009. The personnel committee of the nation’s biggest renewable energy producer today recommended that the board of directors nominate Vladimir Pekhtin to the management board, according to a Rushydro statement. Pekhtin resigned from Russia’s lower house of parliament in February a week after bloggers published documents showing he owned luxury property in Florida.
The RTS Volatility Index, which measures expected swings in stock futures, fell 1.1 percent to 20.78. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 1.4 percent to $27.26 today. The Bloomberg Russia-US Equity Index decreased 1.6 percent to 94.92 in New York.
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 5 percent this year, compared with 10.4 times for the MSCI Emerging Markets Index, which has slid 2.5 percent this year.
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