Russian equities dropped, paring their biggest gain in seven months as bank stocks fell after President Vladimir Putin called for lower rates on loans.
The Micex Index lost 0.4 percent to 1,372.20 by the close in Moscow after jumping the most since Sept. 14 yesterday. Financial shares led declines among nine industry groups, sinking 1.3 percent on average. VTB Group traded down 0.2 percent at 4.55 kopeks, while OAO Sberbank, Russia’s biggest lender, dropped 1.6 percent to 96.37 rubles. Gas producers OAO Gazprom and OAO Novatek slid after a report that the prices they charge may grow more slowly than expected.
Banks “got carried away” with the pursuit of profit, Putin said today during a televised phone-in show. He promised to speak with lenders about lowering rates on loans. The Economy Ministry is seeking a 5 percent increase in gas prices for industrial users for 2014-2015 compared with 15 percent earlier, Interfax reported, citing an unidentified ministry official.
“Sberbank and VTB were affected by Putin’s comment that banks got carried away chasing higher margins,” Kirill Bagachenko, who manages about $3 billion in Russian equities at TKB BNP Paribas Investment Partners in St. Petersburg, said by phone. “Gazprom and Novatek dropped on the report that the Economy Ministry proposed slower gas price growth.”
Gazprom tumbled 1.3 percent to 122.90 rubles and Novatek sank 3 percent to 296.98 rubles.
Moscow United Electric Grid Co. increased 3 percent to 1.35 rubles. The power company’s net income jumped 5.6 percent to 19 billion rubles ($607 million) last year, it said in a statement today. OAO Inter RAO UES climbed 1.9 percent to 1.25 kopeks.
OAO Rostelecom dropped 0.3 percent to 111.37 rubles after Vedomosti reported the state-run phone operator may cut its dividend for 2012 by 45 percent. The company plans to pay 8.2 billion rubles in dividends, according to the paper, which cited an unidentified official and a company board member.
OAO Surgutneftegas, an oil producer, surged as much as 4.5 percent, before closing up 3.9 percent at 27.853 rubles, the second-biggest gainer on the Micex. The company will report earnings based on international accounting standards for the first time since 2001 on April 30, it said yesterday. The depositary receipts gained 5.3 percent to $8.87 in London.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The measure trades at 5.1 times its 12-month estimated earnings and has lost 7 percent this year, compared with a 10.4 multiple for the MSCI Emerging Markets Index, which has dropped 2.6 percent in the period.
The number of shares traded on the Micex was 1.3 times above its 30-day average, while the gauge’s 10-day price swings subsided to 20.574.
The RTS Volatility Index, which measures expected swings in stock futures, slipped 1.4 percent to 21.42, falling for a third day. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, jumped 0.7 percent to 26.449 today, while the Bloomberg Russia-US Equity Index added 0.6 percent to 93.43.