Magnit Tumbles as Mayor Calls for Store Checks: Moscow Mover
OAO Magnit fell on concern Russia’s biggest food retailer may be forced to shut stores in Moscow.
Magnit dropped as much as 3 percent, trading down 1.9 percent by 5:33 p.m. in Moscow. The volume of shares traded was equivalent to about 73 percent of the three-month average. The company’s global depositary receipts fell 2.5 percent to $58.45 in London. Magnit is the best performer on the Micex with a 67 percent gain this year and has the fourth-biggest weighting at 6.1 percent.
Moscow Mayor Sergei Sobyanin on July 26 called for health inspectors, police and the migration service to check the company’s 43 stores in the capital and “take measures to close them,” according to the city government’s website and confirmed by the city government’s spokeswoman Gulnara Penkova. A Magnit representative, who asked not to be identified, citing company policy, declined to comment on the report.
“This is bad news for the entire retail sector,” Ksenia Arutyunova, an analyst at Rye, Man & Gor Securities, said by phone from Moscow.
X5 Retail Group NV (FIVE) was fined about 11 million rubles ($335,608) by the Russian consumer watchdog for technical, consumer rights violations, after 195 stores in Moscow were checked as part of a “planned probe” in April and May, Roman Chereshnev, an X5 spokesman, said by phone today. X5 has paid most of the fine, he said.
Chereshnev didn’t have information about the number of X5’s Moscow stores closed due to violations, while the Kommersant newspaper reported on July 27 that four stores were closed for 30 days.
To contact the reporter on this story: Ksenia Galouchko in Moscow at firstname.lastname@example.org
To contact the editor responsible for this story: Wojciech Moskwa at email@example.com