Russia Stocks Snap Four Days of Gains as Norilsk Declines
Russian stocks rose for a fifth day, the longest winning streak in more than a year, as crude oil climbed and telecom shares led gains.
The Micex Index (INDEXCF) added as much as 0.4 percent before closing up less than 0.1 percent at 1,448.43 by the close in Moscow, the longest streak of gains since September 2011. Telecom industry shares rose 1.5 percent on average. OAO MegaFon (MFON), Russia’s second-biggest mobile-phone company, surged as much as 2.8 percent in Moscow and 3.4 percent in London trading before the stock is added to the MSCI Inc.’s Russia Index. OAO Rostelecom rose 2 percent. OAO Mechel, the country’s largest coking coal producer, increased 2.8 percent, the biggest gainer.
Oil jumped as much as 1 percent to $86.37, rebounding from the lowest close in almost a month in New York as German investor confidence jumped in December on speculation Europe’s largest economy will gather momentum next year. Standard & Poor’s GSCI commodities index increased 0.2 percent. The RTS Index rose 0.3 percent to 1,484.50.
“Oil is keeping the Russian stocks at a strong level,” Sergey Kucherenko, who manages about $50 million in Russian equities at Nomos Bank in Moscow, said by phone. “The overall mood in the market is positive. We may see RTS rising another 2 percent in the next few days.”
The number of shares traded on the Micex was 13 percent below the gauge’s 30-day average, according to Bloomberg data.
OAO GMK Norilsk Nickel fell 2.1 percent to 5,266 rubles, the sharpest drop in a month. More than 853,000 shares traded hands, equivalent to about 2.5 times the stock’s three-month daily average. Norilsk, which has the fifth-highest weighting in the Micex at 6 percent, slid on investor speculation the world’s largest producer of the metal may pay smaller dividends than expected.
The shareholders agreed that Norilsk may distribute at least $9 billion in dividends over three years, three people familiar with the matter, who asked not to be identified because the plan isn’t public, said today. That’s down from an initial projection of more than $10 billion that the three people gave last week. The figure is lower because the final agreement has Roman Abramovich buying stock from shareholders and not treasury stock from the company.
Abramovich’s Millhouse LLC will hold 5.87 percent of Norilsk after the world’s top supplier of nickel and palladium retires treasury stock equal to 17 percent of the company, United Co. Rusal and billionaire Vladimir Potanin’s Interros holding said in a joint statement today. Rusal increased 1.4 percent to 194.80 rubles, the highest level since June 21.
Abramovich may increase his Norilsk stake to 7.5 percent or as much as 10 percent by buying shares from the market, RIA Novosti reported, citing an unidentified person with knowledge of discussions.
The Micex trades at about 5.5 times estimated earnings after adding 3.3 percent this year. That compares with a multiple of 10.6 times for the MSCI Emerging Markets Index, which has gained 13 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
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