Russia Stocks Gain as China Data Lift Mechel to Bashneft Shares
Russian equities rose, paring last month’s drop, as expanding Chinese manufacturing boosted the outlook for earnings at metal and oil producers.
The Micex Index (INDEXCF) added 0.6 percent to 1,372.17 rubles by 11:24 a.m. in Moscow after an 0.8 percent retreat last month. OAO Mechel, Russia’s biggest producer of coal for steelmakers, climbed 1.3 percent to 98.10 rubles, the most since Aug. 26. Oil producer OAO Bashneft rose 1.8 percent to 1,929.70 rubles after UBS AG raised the stock to buy, citing its earnings outlook.
China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August, an official report showed yesterday. The Micex gauge fell 2 percent last week after Russia cut its 2013 economic-growth forecast for the second time this year. The country receives about half of its budget revenue from the oil and natural-gas industries.
“Russian commodity companies will benefit if Chinese growth recovers,” Oleg Popov, who manages $1 billion of securities for Allianz Investments, the asset-management arm of Europe’s biggest insurer, said by phone from Moscow. “This is especially positive news for metal companies.”
OAO Sberbank, Russia’s biggest lender, climbed 1.7 percent to 89.62 rubles, the most since Aug. 22. U.S. markets are closed for a holiday today.
Russia’s economy expanded 1.2 percent in the second quarter, the Federal Statistics Service reported on Aug. 9, missing the median forecast of 2 percent of economists surveyed by Bloomberg. The central bank refrained from cutting interest rates for an 11th month on Aug. 9, while highlighting “significant” risks to growth.
OAO Moscow Exchange, Russia’s main equities and fixed-income bourse, transfered all equities, Russian depositary receipts and exchange-traded funds to T+2 trading mode effective today. The bourse’s stock added 0.5 percent today, extending last week’s 6.8 percent advance.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 4.8 times 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index (RTSI$) advanced 0.7 percent to 1,299.57.
The volume of shares traded on the Micex was 2.8 percent below the 30-day average today, while 10-day price swings rose to 11.166, data compiled by Bloomberg show.
The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York fell 0.2 percent on Aug. 30, while the Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, was little changed at $25.81.
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