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Russia’s Micex Index Drops First Day in Five as Uralkali Falls

Nov. 20 (Bloomberg) -- Russian stocks halted a four-day rally as OAO Uralkali slid the most in two months on concern a sale of Suleiman Kerimov’s stake in the company won’t boost potash prices.

The Micex Index slid 0.2 percent to 1,508.52 by the close in Moscow, the most since Nov. 13 and paring a 3 percent gain in the previous four days. Uralkali, the world’s biggest potash producer, declined 4 percent to 168.81 rubles. OAO Rostelecom dropped 1.3 percent to 115.60 rubles.

Billionaire Mikhail Prokhorov’s Onexim Group agreed on Nov. 18 to buy Kerimov’s 21.75 percent stake in Uralkali. The deal may defuse a dispute between Russia and Belarus sparked by the company’s July withdrawal from a trading venture that used to control 40 percent of potash exports.

“Even if the trading cartel will be revived, it’s unlikely that the potash prices will recover,” Vadim Bit-Avragim, who helps manage about $4.4 billion at Kapital Asset Management in Moscow, said by phone.

Growth Slowdown

Telecoms were the biggest industry-group decliner on the Micex, down 1.6 percent. Rostelecom will sell treasury shares next year, Chief Executive Officer Sergey Kalugin told reporters in Moscow today. The fixed-line operator won the state deal for broadband in small cities that is worth “several” billion of dollars, Kalugin said.

OAO MegaFon, Russia’s second-largest wireless operator, tumbled 3 percent to 1,078.30 rubles. The stock lost 4.6 percent to $32.30 in London.

OAO Gazprom Neft, the oil arm of the nation’s biggest natural gas producer, added as much as 1 percent before closing up 0.2 percent at 148.26 rubles. OAO Novatek advanced 0.9 percent to 407.95 rubles. The two companies agreed to acquire Eni SpA’s holding in a natural gas producer in the Russian Arctic for $2.94 billion.

Yamal Development, the venture owned by the Russian companies, will raise its total share in the SeverEnergia gas and condensate project to 80.4 percent from 51 percent now, Novatek said in a statement today. Novatek’s global depositary receipts increased 1.2 percent to $134.

Russian growth of 1.5 percent to 2 percent a year is a structural slowdown as opposed to a cyclical one, central bank Chairman Elvira Nabiullina said today.

The RTS Index retreated 0.5 percent to 1,447.20. The country’s equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the Micex trading at 4.3 times projected 12-month earnings, compared with a multiple of 10.6 for the MSCI Emerging Markets Index.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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