Russian stocks dropped the most in a week as the world’s biggest energy exporter cut its 2013 growth forecast and OAO Uralkali tumbled after the company’s chief executive officer was detained in Belarus.
The benchmark Micex Index fell 0.4 percent to 1,387.06 by the close in Moscow after gaining as much as 0.8 percent earlier. Uralkali, the world’s biggest potash producer, sank as much as 3.8 percent.
Uralkali CEO Vladislav Baumgertner was charged with abuse of office in Minsk as chairman of Belarusian Potash Co., a joint venture that controlled more than 40 percent of global exports. Uralkali pulled out of the company last month. Russia reduced this year’s growth estimate to 1.8 percent from 2.4 percent, Deputy Economy Minister Andrey Klepach said by phone today.
“Even the 1.8 percent forecast is generous,” Andrey Vashevnik, who manages $25 million as chief investment officer at R&B Russia Investment Fund Ltd., said by phone in Moscow. “A recession is likely, people are very cautious toward Russia.”
Russia’s economy expanded 1.2 percent in the second quarter, the Federal Statistics Service reported on Aug. 9, missing the median forecast of 2 percent of economists surveyed by Bloomberg. That may mean the nation has entered its second recession in five years, according London-based to Capital Economics Ltd.
The central bank refrained from cutting interest rates for an 11th month in August, while highlighting “significant” risks to growth in a statement accompanying its decision.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 5.2 times 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index fell 0.5 percent to 1,324.48.
Uralkali closed down 3.5 percent at 157.62 rubles in Moscow, the most since Aug. 5, snapping three days of gains. Uralkali’s press service declined to comment by phone.
“The Belarusian side has taken the most aggressive position,” Elena Sadovskaya, an analyst at Rye, Man & Gor Securities, said by phone from Moscow. “For the country’s budget, the end to the trade partnership with Uralkali is a serious loss.”
Shares of OAO Mechel, Russia’s biggest coking coal producer, surged 2.8 percent to 104.20 rubles, the highest since May 31. President Vladimir Putin proposed a 10-year mineral extraction tax break for greenfield coal projects.
Crude oil futures fell 0.2 percent to $106.16 a barrel in New York. Brent crude was steady at $110.94 a barrel in London. Russia receives about half of its budget revenue from oil and natural gas sales.
OAO Novorossiysk Commercial Sea Port dropped 5.4 percent to 3.4499 rubles, the biggest decliner. OAO Sberbank, the nation’s largest lender, retreated 0.8 percent to 91.25 rubles. OAO Magnit, the nation’s biggest retailer, declined 1 percent to 7,805.50 rubles.
The volume of shares traded on the Micex was 55 percent below the 30-day average today, while 10-day price swings subsided to 17.6, the lowest since Aug. 14, data compiled by Bloomberg show.
The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York dropped 0.3 percent to 92.61 today, while the Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, fell 0.8 percent to $26.49.