Russian shares rose for a fourth consecutive day before the Federal Reserve announces a decision on whether to reduce stimulus and as OAO Bashneft and AFK Sistema advanced.
The Micex Index added 0.5 percent to 1,486.91 by the close in Moscow. Oil and gas producer Bashneft gained 3.1 percent to 2000.20 rubles, while its preferred shares dropped 1.9 percent to 1,423 rubles, after Sistema offered to end its cross holding. Sistema’s stock increased 2.9 percent to 44.399 rubles and rose 2 percent to $31.86 in London.
Sistema proposed transferring 20.2% of Bashneft’s ordinary shares held by Sistema-Invest to the oil company, according to an e-mailed statement today from the investment company. About 34 percent of economists surveyed by Bloomberg on Dec. 6 predicted that the U.S. central bank will decide to reduce its $85 billion monthly bond-buying program after European markets close today.
“The Fed clearly has reasons to start curbing stimulus, if we look at the main economic indicators, but doing it sharply is complicated and dangerous,” Kirill Yankovskiy, director for equity sales at UralSib Securities in London, said by e-mail. “There’s a big chance that the Fed will leave tapering until next year.”
Investors who do not vote or oppose the reorganization will be offered 1,983 rubles per ordinary share and 1,403 rubles per preferred share in a buyback.
“We think the reorganization represents one more important catalyst that unlocks value in Bashneft by simplifying its corporate structure and increasing transparency,” Ildar Davletshin, an analyst at Renaissance Capital Group Inc. in Moscow, said in an e-mailed note.
Moscow-based builder PIK Group jumped 4.3 percent to 70.40 rubles, the biggest percentage gainer on the Micex, and 5.3 percent to $2.14 in London. Billionaire Alexander Mamut and Sergey Gordeev are set to buy 16 percent and 20 percent, respectively of Nafta Moskva Investment Co., from billionaire Suleiman Kerimov, Vedomosti reported yesterday, citing people familiar with the deal it didn’t name.
The dollar-denominated RTS Index in Moscow climbed 0.7 percent to 1,423.87. Russian equities have the cheapest valuations among 21 emerging-market economies monitored by Bloomberg, with shares on the benchmark trading at 4.3 times projected 12-month earnings compared with a multiple of 10.4 for the MSCI Emerging Markets Index.