Russian stocks rose for the first time in three days on speculation losses this month were overdone even as the European Union prepared new sanctions.
The Micex Index gained 0.6 percent to 1,369.83 by the close in Moscow, trimming this month’s drop to 7.2 percent. The gauge fell to an 11-week low yesterday. OAO GMK Norilsk Nickel, the largest producer of the refined metal, climbed 0.7 percent after Goldman Sachs Group Inc. raised the stock to buy. The Micex weekly price-to-earnings ratio is trading at the biggest discount to the MSCI Emerging Markets index since at least 2003, according to data compiled by Bloomberg.
The EU announced sanctions aimed at key sectors of Russia’s economy, including finance and energy, after the market closed. The bloc will curb state-owned banks’ access to capital markets and restrict the export of equipment for oil production, an official said in Brussels. The Micex’s 14-day relative strength index fell to 28.4 yesterday, below the level of 30 that to some analysts signals the gauge is oversold. It was at 31.2 today.
“This rebound is technical,” Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by phone. “Russian assets are becoming toxic. Sanctions will increasingly weigh on the economy. Companies that have a weaker link to the state will be more in demand.”
OAO Mobile TeleSystems, Russia’s largest mobile operator, gained 3.4 percent, the first advance in five days. MTS is down 18 percent this year. OAO Novatek advanced 1.6 percent.
The EU measures, endorsed today by representatives of the national leaders, will take effect when the legal texts are published on July 31.
VTB Group, Russia’s second-largest lender gained 0.6 percent and OAO Sberbank, the biggest bank, added 0.5 percent.
Investors erased $22 billion from Sberbank’s market value this year through yesterday on concern sanctions will hurt Russia’s $2 trillion economy. The loss is the biggest among global banks valued at $25 billion or more, ahead of a $15 billion drop in market value for Dublin-based Allied Irish Banks Plc, data compiled by Bloomberg show.
State-owned lenders, including VTB, Sberbank, OAO Gazprombank and Vnesheconombank, have more debt to repay in euros, dollars and Swiss francs than they do in rubles over the next three years, according to data compiled by Bloomberg. They have about $15 billion in dollar, euro and franc-denominated bonds maturing 2015 through 2017, compared with about $9.7 billion in ruble debt.
OAO Bashneft gained 1.7 percent, the first increase in three days, while its preferred shares rose 0.1 percent. The stock slumped after AFK Sistema said last week its Sistema-Invest unit received a notice from the registrar about restrictions on transactions in its Bashneft shares.
The Micex trades at 4.9 times estimated earnings, making it the cheapest measure among 21 emerging markets tracked by Bloomberg. That compares with a multiple of 5.3 at the end of February, before Russia’s incursion in Crimea. The dollar-denominated RTS Index lost 0.1 percent to 1,207.29.
The Micex is set for the worst monthly loss since May 2012. The RTS is the worst performer globally this year after Venezuela’s Caracas Stock Exchange with a decline of 16 percent, according to data compiled by Bloomberg.
Yandex NV said it completed a plan to buy back 15 million shares and authorized the repurchase of 3 million more. The company tends to reward shareholders via buybacks rather than dividends, according to Sergey Libin, an analyst at ZAO Raiffeisenbank in Moscow. The stock closed up 5.8 percent in Moscow at 1,116 rubles and jumped 3.4 percent to $31.17 at 11:30 a.m. in New Yorkm.
The owner of Russia’s largest Internet search engine said today earnings in the second quarter rose 17 percent to 5.03 billion rubles ($141 million) before items including interest, taxes, depreciation and amortization.
Twelve stocks yesterday traded above the 50-day moving average. One closed at a new 52-week high and two closed at a new 52-week low.