OAO Magnit, Russia’s biggest food retailer, jumped in Moscow and London trading after MSCI Inc. increased its weighting in a benchmark gauge, fueling bets of fund inflows.
Magnit rose as much as 6.4 percent before climbing 5.1 percent to 7,494.20 rubles by the close in Moscow, the highest level since its listing in July 2006. The number of shares traded was equivalent to about 3.7 times the stock’s three-month average. Global depositary receipts added 3.7 percent to $57.65 in London, increasing for the first time in three days.
MSCI lifted Magnit’s GDRs to 9 percent from 4.7 percent in its Russia 10/40 Index, replacing OAO Mobile TeleSystems’ American depositary receipts and AFK Sistema’s GDRs in the gauge’s top four, according to e-mailed notes from Sberbank CIB and VTB Capital. The changes, effective June 3, will give Magnit the same weight as OAO Lukoil and OAO Gazprom. VTB Capital estimates potential fund inflows into Magnit GDRs to be $331 million, according to its note today.
“The news has a positive effect on the overall attitude toward the stock because it reflects Magnit’s strong business development and its capitalization growth, as well as its high free float in money terms,” Natalia Kolupaeva, an analyst at ZAO Raiffeisenbank, said by phone from Moscow.
Magnit has rallied 55 percent in Moscow this year, while its GDRs have risen 44 percent in the same period. Magnit, the retailer owned by Russian billionaire Sergey Galitskiy, overtook sales at its rival X5 Retail Group NV for the first time since its founding last month. Since a London IPO in 2008, Magnit has tripled its store network to more than 7,000. In 2011, Magnit exceeded the market value of X5, which had expanded by acquiring rivals including Karousel and Kopeyka.
MSCI reduced MTS’s ADRs and Sistema’s GDRs combined weighting in the 10/40 index to 4.5 percent, according to today’s note from Sberbank CIB. MTS rose 0.9 percent to 263.93 rubles in Moscow, while ADRs tumbled 1.5 percent to $20.01 and the benchmark Micex stock index rose 1.4 percent. Sistema’s GDRs declined 2.5 percent to $19.41 in London, and its shares added 1 percent to 27.176 rubles in Moscow.