Russian equities fell as OAO Pharmstandard plunged the most since 2009 after the country’s biggest pharmaceutical company offered to buy out investors at a discount.
The benchmark Micex Index dropped 0.2 percent to 1,345.73 by the close in Moscow after rising as much as 0.5 percent earlier. The dollar-denominated RTS Index added 0.4 percent to 1,282.84. The volume of shares traded on the Micex was 49 percent below the 30-day average and ten-day price swings tumbled to 11.121, the lowest since April 10.
Pharmstandard will offer to buy out shareholders who don’t vote for the planned spinoff of its over-the-counter unit for 2,180 rubles a share, equivalent to about $16.50 per global depositary receipt, at a Sept. 27 meeting, the company said yesterday. That was an 18 percent discount to yesterday’s closing price in London. Crude oil, Russia’s chief export, traded down 0.1 percent at $103.04.
“Pharmstandard has set such a low buyout price that investors were forced to start selling shares,” Ksenia Arutyunova, an analyst at Rye, Man & Gor Securities, said by phone from Moscow.
Pharmstandard declined 8.5 percent to 2,042.30, the most since May 2009. The stock tumbled 18 percent to $16.50 in London, the most since April 2009.
Thirty one stocks fell on the benchmark today, while 17 advanced and two were unchanged. Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg.
OAO Rostelecom’s preferred shares surged 2.6 percent to 75.23 rubles, the biggest increase on a percentage basis on the Micex today.
The Micex slid 2 percent on June 20 after comments by Fed Chairman Ben S. Bernanke that the central bank may wind down its bond buying if the U.S. economy performs in line with projections. The gauge climbed to a five-week high on July 4 as European Central Bank President Mario Draghi pledged to keep interest rates low. Europe is Russia’s biggest trade partner.
Russia’s economy grew 1.6 percent in the first three months, the slowest pace since 2009. Bank Rossii held its refinancing rate at 8.25 percent last month. The overnight repo rate will be held at 5.5 percent when the central bank next meets on July 12, according to the median estimate of 20 economists surveyed by Bloomberg. Seven predict a cut of 25 basis points.
Brent oil was steady at $107.41 a barrel in London, while Standard & Poor’s GSCI Index of commodities and Urals crude were also little changed at 634.54 and $107.51 respectively.
The Russian Volatility Index, which measures expected swings in RTS futures, slumped 3.5 percent. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. added 0.1 percent to 85.40 today.
The Micex trades at 5 times its 12-month estimated earnings, compared with a multiple of 9.6 for the MSCI Emerging Markets Index.