Russian stocks gained in U.S. trading as oil prices advanced and the ruble rose to a two-week high against the dollar amid a rally in emerging-market assets.
OAO Mechel, the mining company seeking to avert bankruptcy, advanced as one of the company’s lenders said it is paying overdue debt. Electronic-payment processor Qiwi Plc and wireless carrier OAO VimpelCom each rose more than 4 percent. The Bloomberg Russia-US Equity Index jumped 1.2 percent. The ruble increased 0.2 percent.
Stocks gained and the ruble strengthened as Brent crude rose 0.6 percent to $64.26 on Thursday, a third straight gain. It traded at $64.17 at 10:43 a.m. Hong Kong time. Oil, which along with natural gas accounts for about half of Russia’s budget revenue, has rebounded 38 percent from this year’s low in January. Brent has sold for an average $62.39 a barrel in the past three months. Jim Rogers, chairman of Rogers Holdings, said the situation in Russia will improve next year even if prices remain at current levels.
“Russia’s stock market is much more attractive to me than any other stock market these days because it is so hated,” Rogers said in an interview at a St. Petersburg International Economic Forum. “But it has good assets, convertible currency, and the central bank has done a very good job.”
Stocks on the Micex index sell in Moscow for an average 6.7 times estimated earnings. The benchmark gauge’s valuation has been the lowest in emerging markets amid a standoff with the U.S. and its allies over the Ukraine crisis as sanctions linked to the conflict push the economy toward its first recession since 2009.
Russian retail sales plunged 9.2 percent in May from a year earlier, after a revised 9.6 percent slide in April, government data showed Thursday. A slump in fixed-capital investment worsened and stretched into a 17th month as real wages and disposable incomes continued to fall.
The Bloomberg gauge of U.S.-traded Russian stocks fell 52 percent last year as tumbling oil prices worsened the impact of international sanctions. European Union governments struck a preliminary accord to extend the measures to the end of January, two officials said Wednesday.
For Rogers, who co-founded the Quantum Fund with George Soros in the 1970s, the price of oil, not sanctions, is the most important factor in the outlook for Russian equities. Valuations already reflect crude at current price levels, he said.
Mechel advanced 4.1 percent to $1.28. The company is paying overdue debt as agreed, Yuri Soloviev, first deputy chairman of VTB Group’s management board, said in St. Petersburg. Qiwi rose 4.3 percent to $29.16. The company is seen as able to continue generating growth in dollar terms, Sberbank CIB analysts said in an e-mailed note. VimpelCom advanced 6.7 percent to $5.54.
The Market Vectors Russia ETF rose 0.3 percent to $18.88. Futures on the dollar-denominated RTS Index expiring in September slipped 0.2 percent 94,870 in U.S. hours.
Moscow-based United Co. Rusal rose 1.2 percent to HK$4.32 at 10:40 a.m. in Hong Kong, heading for the highest close since May 27.
“There is relative stability in Ukraine and the scenario that sanctions will be extended has been priced in for a long time now, so the factors that were driving the market last year are not that important now,” Andrey Shenk, an analyst at Alfa Capital, said by phone Thursday. “Russia is not a market driven by headlines anymore. The dynamics of the market are in line with its developing-nations peers.”