Russian equities pared their first weekly drop in four as crude rose and EON Russia, a unit of Germany’s largest power utility, surged after the board recommended paying out all of last year’s profit in dividends.
The Micex Index climbed 2.1 percent to 1,401.79 by 6:45 p.m. in Moscow, cutting its loss this week to 1.7 percent. EON Russia, the best performer in the index, jumped 7.3 percent to 2.754 rubles.
The company’s board recommended a dividend of 29 kopeks per share for 2012, implying a yield of 11.3 percent, according to Renaissance Capital. Crude oil rose 0.7 percent to $95.78 a barrel in New York. The oil and natural gas industries account for about half of Russia’s budget revenue.
“The investment case for the Russian utilities universe has now narrowed to this particular stock,” Vladimir Sklyar, an analyst at Renaissance Capital, said in an e-mailed note, reiterating a buy recommendation.
Power stocks led gains among nine industry groups, adding 5 percent. OAO Russian Grids rose 7 percent to 1.319 rubles after tumbling the most since May 2012 yesterday. MSCI Inc. cut the stock from its country gauge, effective June 3, following a review of its indexes.
OAO Mechel, Russia’s biggest coking coal producer, advanced 3.5 percent to 117 rubles. It fell for a fourth day yesterday, dropping to a February 2009 low, after being excluded from the MSCI measure.
VTB Group, the nation’s second-biggest lender, added 1.6 percent to 4.50 kopeks. The pre-emptive rights offering for VTB’s local shares closed today.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.3 times its 12-month estimated earnings and has lost 5 percent this year, compared with a 11.1 multiple for the MSCI Emerging Markets Index, which has dropped 1 percent in the period.
The dollar-denominated RTS Index added 1.8 percent to 1,405.34, advancing for the first time in six days. The RTS Volatility Index, which measures expected swings in stock futures, dropped 4.3 percent to 20.76, snapping a six-day rising streak.