Russian equities rose for the first time in three days as OAO Uralkali, the world’s largest potash producer by output, surged after a 13 percent slump.
The benchmark Micex Index added 0.1 percent to 1,403.14 by the close in Moscow, a 1.3 percent decline in the week. Uralkali gained as much as 4.3 percent, closing up 1.6 percent at 189.43 rubles. OAO Gazprom, Russia’s biggest company and natural-gas export monopoly, increased 0.7 percent to 128.80 rubles.
Russia-dedicated funds attracted $12 million in the week ended July 24, compared with $102 million in the week earlier, according to an e-mailed note from UralSib Capital, citing EPFR Global data. Uralkali lost 13 percent over four days as banks including VTB Capital and Goldman Sachs Group Inc. cut the stock’s rating. The company said July 22 it had bought about $1.3 billion of its own shares under a one-year $1.6 billion buyback program.
“The market fell for two days and now we’re seeing a return of investor interest for riskier assets,” Aleksei Belkin, who helps manage about $4.4 billion in assets as chief investment officer at Kapital Asset Management LLC, said in Moscow. “Uralkali dropped for several days, the stock is rebounding.”
Billionaire Alexander Nesis sold shares in Uralkali two weeks after the company bought out fellow shareholder Zelimkhan Mutsoev for $1.3 billion, according to three people with knowledge of the matter. The press services of Nesis’s ICT Group and Uralkali press service declined to comment. Uralkali was the Micex’s biggest weekly decliner with a 12 percent drop.
The dollar-denominated RTS Index sank 0.4 percent to 1,348.37. Crude oil retreated 1.3 percent to $104.14 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 dropped 0.9 percent, the third day of declines.
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 26 percent below the 30-day average, data compiled by Bloomberg show, while 10-day price swings fell to 12.32. The 50-member Micex’s 4.9 percent decline in 2013 compares with a 1.7 percent increase for India’s benchmark Sensex Index and a 20 percent loss for Brazil’s Ibovespa Index.
The 14-day relative strength index on the Micex climbed to 59 from 58 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.
The Russian Volatility Index, which measures expected swings in RTS futures, fell 3.8 percent, the sixth day of declines. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. decreased 0.8 percent to 90.88, the third day of declines.
The Micex trades at 5.3 times its 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index.