Russian shares rose for a second day as Brent oil gained, boosting appetite for stocks in the world’s biggest energy exporter, and investors awaited the start of the Federal Reserve’s two-day meeting.
The Micex Index climbed 1.2 percent to 1,470.22 by the close in Moscow, the highest since Dec. 2. OAO TMK, the world’s largest maker of pipes for the oil and gas industry by volume, added 4.3 percent to 93.56 rubles. Natural gas exporter OAO Gazprom increased 2.2 percent to 136.40 rubles, while preferred shares of OAO Bashneft, the Russian oil producer controlled by billionaire Vladimir Evtushenkov’s AFK Sistema, gained 3.8 percent to 1,437 rubles.
Crude, Russia’s chief export earner, added 1.2 percent to $110.15 a barrel in London after Libyan rebels refused to hand over control of three ports to the government. The Fed may begin reducing its $85 billion of monthly bond purchases at a Dec. 17-18 meeting, according to 34 percent of economists surveyed Dec. 6 by Bloomberg, up from 17 percent in a Nov. 8 poll.
“We’re expecting the market to stay at this level until the end of the year, there’s less activity as people prepare for the holidays,” Dmitry Mikhailov, a money manager at Alfa Capital Partners Ltd. in Moscow, where he helps manage about $3 billion, said by phone. “I’m not expecting any surprises from the Fed meeting.”
Russia-dedicated equity funds received about $120 million in the week to Dec. 11, UralSib Capital said in a note on Dec. 13, citing EPFR Global data.
Bashneft will determine the price for a share buyback under a reorganization plan to end cross-ownership with Sistema Invest on Dec. 17, the company said in a regulatory filing last week. The oil company’s ordinary stock increased 2 percent to 1,942.20 rubles, the highest since Oct. 29. Sistema advanced 2.1 percent to 41.70 rubles, while depositary receipts gained 3 percent to $30 by 3:40 p.m. in London.
“While we consider the increase in the transparency of Bashneft’s corporate structure a positive development, the finalization of the reorganization is crucial for minorities implications,” VTB Capital analysts said in an e-mailed note today.
Russia’s central bank kept interest rates unchanged for a 15th month on Dec. 13, as forecast by all 23 economists in a Bloomberg survey, after inflation accelerated more than predicted in November. The Micex has fallen 0.2 percent this year amid signs the economy is foundering. An improving U.S. job market has increased the chances of a reduction in the Fed’s asset purchases, Fed Bank of St. Louis President James Bullard said Dec. 9.
The dollar-denominated RTS Index in Moscow added 1.1 percent to 1,407.25. Russian equities have the cheapest valuations among 21 emerging-market economies monitored by Bloomberg, with shares on the benchmark trading at 4.2 times projected 12-month earnings, compared with a multiple of 10.1 for the MSCI Emerging Markets Index.