Russian stocks rose for a third day as OAO Novatek, the nation’s second-biggest natural gas producer, jumped after President Vladimir Putin fueled wagers a monopoly on liquefied natural gas exports may soon be lifted.
The Micex Index erased losses to climb 0.4 percent to 1,480.20 by the close in Moscow, the highest since Sept. 26. Novatek added 2 percent, the most since Sept. 5, to 387 rubles. OAO Gazprom, Russia’s natural-gas export monopoly, rallied 1.6 percent to 147.20 rubles. OAO Magnit, the nation’s biggest food retailer, advanced 2.7 percent to 8,630 rubles, the highest since the 2006 listing.
Putin in June called for export laws changes to encourage companies to produce LNG and take advantage of a “window of opportunity” in the Asia-Pacific market. Russia will move to liberalize LNG exports in the “nearest future,” Putin said at a summit in Bali, Indonesia today.
“Shares rose after the president’s comments,” Anvar Gilyazitdinov, who manages about $10 million at Rye, Man & Gor Securities in Moscow, said by phone. “Novatek is very sensitive to any type of comment that signals that the day market liberalization will finally happen is coming closer. Gazprom rallied today because Asia is its main export target right now, investors are hoping for new contracts.”
Gazprom and China National Petroleum Corp. agreed to strategic terms on gas shipments last month. Novatek, controlled by billionaires Gennady Timchenko and Leonid Mikhelson, signed an accord with CNPC and Chinese banks on project financing for the Yamal LNG project, which plans to sell liquefied natural gas in Asian markets, according to a statement from the companies on Sept. 10.
The Micex slipped as much as 0.8 percent earlier. With the U.S. set to exhaust measures to avoid breaching its debt ceiling on Oct. 17, House of Representatives Speaker John Boehner said lawmakers won’t raise the limit without packaging it with other provisions, a nonstarter for President Barack Obama.
OAO Russian Grids dropped 1.6 percent to 93 kopeks, the lowest since March 2009. Utilities sank 0.4 percent on average.
“Boehner’s comments that Republicans are willing to go to the very end have created fear that the U.S. might actually default on its debt,” Slava Smolyaninov, a strategist at UralSib Capital in Moscow, said by phone. “Investors are fleeing risky assets. If economic growth in the U.S. slows, the Russian economy will also lose out.”
A shutdown lasting one week would probably shave 0.1 percentage point from economic growth, according to the median estimate of economists in a Bloomberg survey.
Crude oil, Russia’s chief export earner, fell 0.6 percent to $103.23 in New York. Russia receives about half of its budget revenue from the oil and natural-gas industries. In London trading, Gazprom gained 1.2 percent to $9.08, while Novatek jumped 2.9 percent to $135.
Ten-day price swings on the Micex climbed to 13.565. Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.4 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index closed little changed at 1,444.32.