Russian equities fell the most in almost a month as OAO Lukoil and OAO Gazprom, the biggest stocks in the benchmark Micex Index, dropped as they traded without the right to a dividend.
The gauge retreated 0.8 percent to 1,405.76 by the close in Moscow, the most since April 17, after rising as much as 0.3 percent earlier. Lukoil, Russia’s second-largest oil producer, which has the biggest weighting at 16 percent, slid 1.4 percent to 2,021.30 rubles. Gazprom, Russia’s biggest company and natural gas export monopoly, declined 3.2 percent to 125.50 rubles. Both companies went ex-dividend today, according to data compiled by Bloomberg.
Crude oil, Russia’s chief export earner, slipped for the fourth day in New York, trading down 0.1 percent at $95.05 a barrel. Most metals retreated in London including nickel, tin and copper as concern grew China’s economy is slowing after JPMorgan Chase & Co. reduced the nation’s second-quarter growth forecast.
“Yesterday was the last day for major Russian companies to trade with a right to a dividend,” Sergey Kucherenko, who manages about $50 million in Russian equities at Nomos Bank in Moscow, said by phone “Today, these stocks fell by the size of the dividend. Oil, metals are weakened by Chinese growth concerns.”
Investors had to own the stock before today to receive the dividend payout, which traders deduct from the company’s share price on the ex-dividend date. Regional oil producer OAO Tatneft’s preferred shares slumped 6.2 percent to 98 rubles. It also went ex-dividend today, according to data compiled by Bloomberg. Tatneft’s ordinary shares declined 2.9 percent to 201.89 rubles.
Gazprom’s depositary receipts added less than 0.1 percent to $7.98 in London. Russia may cut regulated gas price growth to 5 percent to 10 percent for 2014 and 2015, Denis Volkov, the head of oil and gas regulation at Federal Tariff Service, said in St. Petersburg today.
Lukoil gained 0.2 percent to $64.30 in London. The ex-dividend date for both companies’ GDRs was May 9, according to data compiled by Bloomberg. Russia’s Finance Ministry is recommending an 8 percent increase in the base oil extraction tax rate to 508 rubles ($16) from 470 rubles, according to a plan presented to government officials.
OAO Severstal, a steel producer, lost 3.4 percent to 266.50 rubles, declining for a third day. The company’s GDRs slid 3.9 percent to $8.50 in London. OAO Mechel, Russia’s biggest coking coal producer, declined 2.9 percent to 122.90 rubles. The American depositary receipts lost 2.5 percent to $3.93.
OAO Novolipetsk Steel dropped 3.9 percent to 49.50 rubles in Moscow, while GDRs declined 4.7 percent to $15.80. Oil and gas and basic materials shares led the declines among nine industry groups on the Micex.
Utilities added 3.8 percent on average. OAO Russian Grids, formerly known as MRSK Holding, jumped 7.3 percent to 1.396 rubles, the most on the Micex. OAO Inter RAO UES added 6.3 percent to 1.3784 kopeks, while Federal Grid Co. increased 6.8 percent to 12.83 kopeks.
VTB Group, Russia’s second-biggest lender, retreated 3.9 percent to 4.61 kopeks. The stock rose 12 percent from April 29 -- when it announced investors agreed to buy all $3.3 billion of shares it’s selling to increase capital -- through May 8. The depositary receipts dropped 1.1 percent to $2.969 in London.
“It’s mostly a technical move,” Luis Saenz, the head of equity sales and trading at BCS Financial Group, said by e-mail. “Some fund managers are participating in the SPO and trimming their current holding in order to manage the notional exposure.”
The pre-emptive rights offering for VTB’s local shares closes on May 17 and today for its depositary receipts, Saenz said in an e-mailed note yesterday.
MSCI Inc. will announce the results of its semi-annual index rebalancing for the Russia index on May 15, with changes scheduled to take effect on June 3.
OAO Magnit, Russia’s biggest food retailer, added 2.1 percent to 7,191.50 rubles, the third day of advances. GDRs jumped 3.9 percent to $56.50 in London. The shares are rising on bets of inclusion in the MSCI 10/40 Index, according to Julian Rimmer, a trader at CF Global Trading in London.
The number of shares traded on the Micex was 9.9 percent above the gauge’s 30-day average, while the index’s 10-day price swings rose to 18.208.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times its 12-month estimated earnings and has lost 4.7 percent this year, compared with a 10.5 multiple for the MSCI Emerging Markets Index, which has dropped 1 percent in the period.
The dollar-denominated RTS Index fell 0.7 percent to 1,412.69. The RTS Volatility Index, which measures expected swings in stock futures, rose 0.3 percent to 20.65. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, added 0.2 percent to $27.38 in New York.