Russian shares advanced as OAO Magnit, the nation’s biggest food retailer, jumped to a record after net income beat analyst estimates.
The benchmark Micex Index increased 0.1 percent to 1,417.34 by the close in Moscow. OAO Severstal, Russia’s second-largest steelmaker, climbed 3.4 percent to 257.40 rubles after posting a 5 percent advance in second-quarter steel output.
Magnit climbed 5.8 percent to 8,251.20 rubles, the highest since July 2006, when the stock was listed, while London shares surged 4.8 percent to $61. Net income in the second quarter rose 48 percent to 8.4 billion rubles ($260 million) from the same period last year, beating analyst estimates. Magnit is the best performer on the Micex this year with a 71 percent gain and has the fourth-biggest weighting at 6.2 percent.
“Magnit’s growth story continues,” Andrei Nikitin, an analyst at Alfa Bank in Moscow, said by phone. “While it continues to show stellar results, investors will buy the stock.”
Crude oil, Russia’s main export earner, was little changed at $107.06 a barrel in New York. Russia receives about 50 percent of its budget revenue from oil and natural gas sales. Standard & Poor’s GSCI Index of commodities was also little changed at 648.62 after falling 0.3 percent yesterday.
OAO Uralkali fell 6.6 percent to 198.91 rubles, the lowest level since October 2011 and the biggest decliner on the Micex, as the world’s largest potash producer by output neared the end of a $1.6 billion buyback. London shares dropped 6.4 percent to $30.75.
The company said yesterday it bought back about $1.3 billion of shares as part of its buyback program. In November, the company approved a one-year $1.6 billion share buyback after the stock declined.
The Micex climbed 1.7 percent last week on speculation the U.S. Federal Reserve will keep stimulus in place. Russia’s equities trade at the cheapest valuations based on estimated earnings among 21 emerging economies tracked by Bloomberg.
While Bank Rossii kept its main rates unchanged on July 12, it introduced a one-year floating-rate facility with a starting cost of 5.75 percent, compared with its 7.5 percent fixed-rate for similar-maturity loans. Russia’s economy grew 1.6 percent in the first three months, spurring calls for easing.
The volume of shares traded on the Micex was 22 percent below the 30-day average, data compiled by Bloomberg show, while 10-day price swings retreated to 19.141. The 50-member Micex’s 3.9 percent decline in 2013 compares with a 4.5 percent increase for India’s benchmark Sensex Index and Brazil’s Ibovespa Index’s 20 percent loss.
The 14-day relative strength index on the Micex climbed to 64.2 from 63.8 yesterday. The RSI measures how rapidly prices have advanced or dropped during a specified time period. Readings below 30 indicate a security may be poised to rise, while those above 70 signal a potential drop.
Forty stocks, or 80 percent, were trading above their 50-day moving average on the Micex yesterday. One closed at a 52-week low and one at a 52-week high, according to data compiled by Bloomberg. The Russian Volatility Index, which measures expected swings in RTS futures, dropped 0.1 percent, falling for a fourth day. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. climbed 0.8 percent to 93.27 today.
The Micex trades at 5.3 times its 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index.