Russian equities fell the most in three weeks as the ruble’s retreat pushed down shares in OAO Sberbank, the nation’s biggest lender.
The Micex Index lost 1.1 percent to 1,478.23 by the close in Moscow. Sberbank, which has a 13 percent weighting on the benchmark gauge, fell 1.8 percent to 97.84 rubles, the lowest since Oct. 2. OAO Dixy Group, a retailer, declined 1.7 percent to 348.99 rubles, while OAO Mobile TeleSystems, the nation’s biggest wireless operator, slid 2.1 percent to 299 rubles.
The ruble slid to the weakest intraday level against the dollar since March 2009, as predictions of further Federal Reserve stimulus cuts fueled the worst selloff in developing-nation currencies in five years. A weaker ruble encourages Russians to withdraw and convert local-currency deposits, Sberbank’s main source of funding, while hurting retailers by making imports more expensive in ruble-denominated prices. The Fed next meets Jan. 28-29.
“For banks, the situation with the weakening ruble isn’t good, their main clients are getting hurt,” Vladimir Bragin, head of research at Alfa Capital in Moscow, where he helps manage $2.9 billion, said by phone. “One must be careful about retail stocks right now, we shouldn’t expect any star results.”
Russia’s December unemployment rose more than forecast to 5.6 percent, an eight-month high, the Federal Statistics Service said in an e-mailed statement on Jan. 24.
“Rising unemployment and the ruble’s slump will hit the consumer,” Bragin said.
OAO Magnit, the nation’s biggest food retailer, dropped 1.2 percent to 8,165 rubles, the lowest since Sept. 25, after earlier rising as much as 4.1 percent. The stock rose 1.3 percent to $54.45 by 3:09 p.m. in London, widening the premium versus local shares to 15 percent.
Magnit posted a record profit margin in the fourth quarter as it secured more favorable purchasing terms from suppliers and curbed costs amid slowing sales growth. The company cut its sales growth forecast for 2014 to 22 percent to 24 percent this year versus previous guidance of 25 percent growth, Chief Executive Officer Sergey Galitskiy said on today’s conference call.
AFK Sistema, billionaire Vladimir Evtushenkov’s holding company, slumped 8.8 percent to 39.801 rubles, the biggest drop since Aug. 2011 and the most on the Micex. The stock declined 4.9 percent to $25.80 in London.
Crude oil, the nation’s biggest export earner, gained 0.2 percent to $96.80 in New York. Brent crude declined 0.5 percent to $107.38. Russia receives about half of its budget revenue from oil and natural gas sales.
Russia-dedicated stock funds posted $15 million in outflows in the week ended Jan. 22, UralSib Capital said in an e-mailed note on Jan. 24, citing EPFR Global data.
The dollar-denominated RTS Index fell 1.3 percent to 1,346.51. OAO Novolipetsk Steel slumped 3.1 percent to 52.22 rubles, the lowest since Dec. 12. The steelmaker said its total steel product sales fell 4.2 percent from a year earlier in the fourth quarter.
Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 3.3 times projected 12-month earnings, compared with a multiple of 9 for the MSCI Emerging Markets Index.