Russian equities rose from the lowest level in a week as OAO Gazprom, the nation’s biggest company, climbed and crude oil advanced.
The 50-stock Micex Index added 0.6 percent to 1,297.59 by the close in Moscow, paring the slump this quarter to 9.8 percent. The dollar-denominated RTS Index, which entered a bear market June 5, increased 0.8 percent to 1,243.20. The Russian Volatility Index, which measures expected swings in RTS futures, tumbled 7.1 percent after surging to the highest since August yesterday.
Russian shares erased yesterday’s decline as crude oil, the country’s chief export earner, added 0.6 percent to $95.71 in New York. Most metals, including nickel, copper and tin rose in London. Stocks extended their advance after data showed U.S. house prices, new-home sales and consumer confidence topped estimates. Gazprom, which has the second-biggest weighting on the Micex at 14 percent, added 1.6 percent to 108.89 rubles, the most since May 31.
“We saw a nice bounce in oil and commodities today, which supported the Russian market after yesterday’s losses,” Ivan Manaenko, the head of research at Veles Capital, said by phone from Moscow.
State-run OAO Rosneft may buy OAO Bashneft, Vedomosti reported today, citing people familiar with the matter it didn’t identify. AFK Sistema, which holds about 87 percent of Bashneft, rose as much as 9.1 percent before closing down 0.2 percent at 27.233 rubles. Sistema surged 2 percent to $18.66 in London. Preferred shares of Bashneft slid 8.2 percent to a record-low 954.30 rubles, the sharpest retreat on the Micex.
“Sistema can make a lot of money on this deal,” Alex Vengranovich, an analyst at Otkritie Capital, said by phone.
Rosneft became the world’s largest publicly traded oil producer by output in March when it bought TNK-BP from BP Plc and a group of billionaires in the country’s largest acquisition. Rosneft’s Chief Executive Officer Igor Sechin proposed last month that the state-run company be accountable for TNK-BP’s dividends starting only from March 21, the day it acquired the venture in the $55 billion deal.
“Bashneft is tanking because of the recent story with Rosneft and TNK-BP minorities,” Vengranovich said. “Bashneft minorities are unlikely to get a payout if Rosneft takes over.”
Sistema Chairman Vladimir Evtushenkov said he was unaware of the possible purchase when contacted by phone by Bloomberg News. Rosneft’s spokesman declined to comment.
If the deal were to go through, Sistema would “make a significant gain” as it bought Bashneft for about $2 billion, VTB Capital analysts wrote in an e-mailed note. Sistema’s 87 percent stake is valued at about 320 billion rubles ($9.7 billion) based on today’s market price.
Standard & Poor’s GSCI Commodities Index increased 0.6 percent to 614.01. Brent gained 0.7 percent to $101.83 a barrel in London, rising for a second day. Urals crude traded up 0.3 percent at $101.11.
OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, added 2.3 percent to 4,599 rubles. Norilsk increased 2.4 percent to $13.93 in London.
OAO Magnitogorsk Iron & Steel advanced 1.9 percent to 7.530 rubles, the highest since May 28. OAO Novolipetsk Steel added 2.3 percent to 42.15 rubles. NLMK was lifted to buy and Magnitogorsk to neutral at Morgan Stanley on “strong” balance sheets, according to today’s e-mailed note. OAO TMK, the world’s biggest pipemaker by output, climbed 2 percent to 76.97 rubles. Morgan Stanley lifted TMK to buy from neutral.
OAO Mechel, Russia’s biggest coking coal producer, dropped 1.7 percent to 94.90 rubles. The stock was cut to the equivalent of sell from neutral at Morgan Stanley. Mechel added 0.4 percent to $2.82 in New York.
Russian stocks slumped on June 20 after U.S. Federal Reserve Chairman Ben S. Bernanke said the regulator will probably taper its bond buying later in 2013 and halt purchases around mid-2014 if the world’s largest economy performs in line with projections.
Russia’s stocks have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The economy of the world’s biggest energy exporter grew 1.6 percent in the first three months, the slowest pace since 2009. Bank Rossii held its refinancing rate at 8.25 percent on June 10 after inflation accelerated for a second month in May to the fastest pace in 21 months.
Out of 50 stocks, 37 increased and 13 dropped on the Micex. The volume of shares traded on the gauge was 25 percent below the 30-day average, while 10-day price swings dropped to 21.454.
Four stocks on the Micex closed yesterday at a 52-week low and none at highs, according to data compiled by Bloomberg. Sixteen stocks, or 32 percent, were trading above their 50-day moving average.
The Micex trades at 4.9 times its 12-month estimated earnings, having lost 12 percent this year, compared with a multiple of 9.2 for the MSCI Emerging Markets Index, which is down 16 percent. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. climbed 0.4 percent to 82.09 today.