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Russia Stocks Gain as Indonesia Nickel Export Ban Spurs Norilsk

Russian shares gained the most this year as OAO GMK Norilsk Nickel climbed after an Indonesian ban on mineral-ore exports spurred a jump in the price of the metal.

The Micex Index added 0.6 percent to 1,477.56 by the close in Moscow, rising for the third day and trimming its 2014 decline to 1.8 percent. Norilsk, the world’s biggest producer of nickel, increased 4.7 percent, the most since December 2012, to 5,461 rubles. OAO Aeroflot, the nation’s biggest airline, rose 6.6 percent to 87.95 rubles, the biggest gain on the Micex in percentage terms.

Nickel prices advanced to a two-week high as Indonesia’s export ban, which took effect yesterday, fueled speculation supply of the metal will drop. Norilsk has a 3.9 percent weighting on the Micex. Aeroflot rose for the first time in three days as Bank of America Merrill Lynch raised its price estimate to 100 rubles and reiterated a buy recommendation, pointing in part to increased business as Russia prepares to host the Olympics in Sochi next month.

“Norilsk jumped on Indonesia news,” Alexei Bachurin, an equity trader at Renaissance Capital Ltd. in Moscow, said by e-mail. “The reason the move is that strong is because the general expectation was that Indonesia will put a ban, but with a lot of exceptions.”

Appetite for emerging-market assets has increased since data showed on Jan. 10 that U.S. payrolls grew in December at the slowest pace in almost three years, easing concern the U.S. will accelerate cuts in monetary stimulus. The dollar-denominated RTS Index gained 0.4 percent to 1,401.82, paring this year’s 2.8 percent retreat.

Slower Sales

Shares of OAO Magnit, the nation’s biggest food retailer, fell for a third day, declining 1.9 percent to 8,296 rubles, the lowest level since Oct. 3. Revenue growth slowed to 23 percent in December from 29 percent a month earlier, according to a statement on Jan. 10. Magnit is set to report fourth-quarter results on Jan. 27, data compiled by Bloomberg show.

“Magnit stock is very sensitive to the sales growth,” Dmitry Malykhin, who oversees $30 million in Russian assets at Moscow-based hedge fund Da Vinci CIS Opportunities, said by phone. “Investors will be very keen to find out the fourth-quarter earnings.”

The retailer’s global depositary receipts dropped 4 percent to $57.70 by the close in London, while Norilsk’s stock surged 4.6 percent to $16.60.

Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 4.4 times projected 12-month earnings, compared with a multiple of 10.3 for the MSCI Emerging Markets Index.

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