Russia Stocks Rise on China Outlook as Uralkali Advances
Russian stocks advanced after falling the most in almost seven weeks yesterday as potash miner OAO Uralkali rose and a measure of China’s services industries climbed, boosting the outlook for exports.
The Micex Index (INDEXCF) gained 0.2 percent to 1,456.49 by the close in Moscow. Twenty-eight shares in the gauge climbed, while twenty-two fell. Uralkali, which said today third-quarter output increased, added 1.7 percent to 170.29 rubles. United Co. Rusal, the world’s biggest aluminum producer, soared 4.5 percent to 98 rubles, the steepest advance on the broader measure.
Russia is pushing for Uralkali to resume cooperation on potash sales with Belarus, Dow Jones reported yesterday, citing unidentified people close to the talks. The rift led to the end of a joint venture that controlled 40 percent of global potash exports and spurred a decline in shares of companies producing the commodity. China’s non-manufacturing Purchasing Managers’ Index rose to 55.4 last month from 53.9 in August, data released today showed. A level above 50 signals expansion.
“Uralkali is gaining because people are expecting it to reinstate the partnership with Belarus very soon,” Vadim Bit-Avragim, who helps manage about $4.4 billion at Kapital Asset Management in Moscow, said by phone. “The only good news today is the Chinese data, which is positive for Russian companies.”
Russia has told bidders for Suleiman Kerimov’s 22 percent stake in Uralkali they should repair the fallout with Belarus, according to Dow Jones. The stake will probably be sold to a local investor, the newswire reported. Uralkali’s chief executive Vladislav Baumgertner was arrested in Minsk in August following talks over the withdrawal from the trading venture.
Uralkali said today potassium chloride output rose to 2.7 million tons from 2.6 million tons a year earlier. The shares have slumped 28 percent this year, compared with a drop of about 1 percent for the Micex.
The benchmark stock index earlier swung between gains and losses as the U.S. government’s partial shutdown entered its third day. President Barack Obama and congressional leaders failed to break their impasse over the budget in face-to-face talks late yesterday. A shutdown lasting one week would probably shave 0.1 percentage points from economic growth, according to the median estimate of economists in a Bloomberg survey. The cost would accelerate if the closing persists.
Polymetal International Plc fell 2.7 percent to 324.80 rubles in the fifth day of declines and OAO Alrosa, the world’s largest diamond miner, declined 0.5 percent to 38.60 rubles. The company surged 7 percent yesterday after saying Russia and the Republic of Yakutia, in the country’s far east, would sell a combined 14 percent stake. Alrosa said it will also sell about 2 percent of treasury stock, with proceeds used to reduce debt.
TCS Group Holding Plc, the owners of Tinkoff Credit Systems Bank, announced plans for a $750 million initial public offering in London this quarter, set to become the first Russian company to sell shares in the city this year. TCS is poised to sell between $150 million and $200 million in the form of global depositary receipts, the Russian consumer lender said today.
“Tinkoff’s IPO will trigger a lot of global investor interest, more than Alrosa,” Kapital’s Bit-Avragim said. “This business is closer to the consumer sector, unlike mining.”
Ten-day price swings on the Micex declined to 11.915. Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.3 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index (RTSI$) added 0.4 percent to 1,427.81.
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