Russian equities rose for a fourth day as utilities rebounded and investors speculated VTB Group’s share sale will boost its weighting in a benchmark index.
The Micex stock gauge added 1.8 percent to 1,448.42 by the close in Moscow, the biggest gain since May 17. The volume of shares traded was 24 percent above the measure’s 30-day average, while 10-day price swings spiked to 20.194, the highest since May 7. VTB rose 3.7 percent to 4.98 kopeks, gaining for a fourth day. Federal Grid Co. jumped 5.9 percent to 13.40 kopeks, while OAO Inter RAO UES closed up 5.5 percent at 1.48 kopeks.
VTB’s sale of $3.3 billion of new shares in Moscow will boost its free float to 39 percent and may see MSCI Inc. lift the bank’s weighting to 3.3 percent from 2.1 percent, Sberbank CIB said in an e-mailed note today. MSCI’s move may trigger passive fund inflows of $64 million, according to Sberbank. The lender’s GDRs increased 4.1 percent to $3.188 today.
“VTB’s SPO went well and the MSCI rebalancing expectations are positive, there’s demand for the shares right now,” Andrey Vashevnik, who manages $25 million as chief investment officer at R&B Investment Fund Ltd. in Moscow, said by phone from Moscow. “Power sector stocks are feeling good, they fell a lot earlier.”
VTB sold 102.5 billion rubles ($3.3 billion) of shares “entirely” on the Moscow Exchange in an offering that closed today, VTB’s Chief Executive Officer Andrey Kostin said in Sochi at a meeting with President Vladimir Putin after the market closed.
The Micex extended gains as Federal Reserve Chairman Ben S. Bernanke said the U.S. economy remains hampered by high unemployment and government spending cuts, and that raising interest rates or reducing asset purchases too soon would endanger the recovery.
OAO Sberbank increased 1.8 percent to 110.80 rubles in Moscow, the highest level since July 2007. GDRs added 1.9 percent to $14.26. OAO Moscow Exchange was the biggest gainer on the Micex, rising 7.1 percent to 54.99 rubles, the most since its February initial public offering.
Power stocks climbed the most among nine industry groups, adding 3.8 percent on average.
Crude, Russia’s main export earner, declined 1.3 percent to $94.96 a barrel in New York. Russia receives about half of its budget revenue from oil and natural gas. The Standard & Poor’s GSCI Commodities Index fell 0.4 percent to 628.50, dropping for the second day.
GDRs of OAO MegaFon, Russia’s second-largest mobile operator by revenue, increased 5.3 percent to $33.75, a record high. Morgan Stanley named the stock its top pick in the telecom sector and raised the price estimate to $35 from $32, reiterating its buy recommendation, according to today’s e-mailed note.
The Russia Depositary Index jumped 2.2 percent, rising for the fourth day. GDRs of OAO Novatek led the advance, climbing 7.5 percent to $112.50. Russia’s biggest non-state natural gas producer rallied 5.1 percent to 328.18 rubles, the most since September 2012.
X5 Retail Group NV added 2.7 percent to $20.33. The food retailer’s April sales increased 8 percent from a year earlier, it said in a website presentation yesterday.
Russia’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.4 times its 12-month estimated earnings and has lost 1.8 percent this year, compared with a 10.6 multiple for the MSCI Emerging Markets Index, which has dropped 0.6 percent in the period.
The dollar-denominated RTS Index jumped 2 percent to 1,461.93. The RTS Volatility Index, which measures expected swings in stock futures, rose 0.6 percent to 20.43 today. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. was little changed at 95.69.