Russia Stocks Climb to Eight-Month High as Gazprom, Magnit Rise
Russian stocks rose to the highest level since February as signs U.S. lawmakers will reach a deal to avoid possible default boosted appetite for riskier assets.
The Micex Index (INDEXCF) increased 1.2 percent to 1,528.97 by 11:10 a.m. in Moscow, the highest intraday level since Feb. 14. The dollar-denominated RTS (RTSI$) gained 1.3 percent to 1,492.76. OAO Magnit, the nation’s largest food retailer, traded up 1.2 percent at 8,460 rubles. OAO Gazprom, the natural gas export monopoly, increased 1.5 percent to 155 rubles. OAO Sberbank, the country’s biggest lender, added 0.8 percent to 103.85 rubles.
Democrat and Republican Senate leaders made reference to progress in talks on a deal to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15. The U.S. will not default, former Treasury Secretary Lawrence Summers said in Seoul today. Crude, Russia’s main export earner, was steady at $102.37 in New York.
“The market has received good news that there’s been progress in U.S. government talks,” Alexander Kostyukov, an analyst at Veles Capital, said by phone from Moscow. “A U.S. default would be devastating for investors’ appetite for riskier markets, like Russia.”
Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.5 times projected 12-month earnings, compared with a multiple of 10.7 for the MSCI Emerging Markets Index. Ten-day price swings on the Micex sank to 11.758, the lowest since Sept. 4, from 14.397 yesterday.
OAO TMK, Russia’s largest producer of steel pipes for the oil and gas industry, jumped 2.2 percent to 86 rubles. Its global depositary receipts were admitted to trading on the Moscow Exchange, according to a regulatory filing today. TMK’s GDRs advanced 2.4 percent to $13.42 in London.
OAO Mobile TeleSystems, Russia’s largest wireless carrier, increased 2.3 percent to 344.53 rubles. Sberbank gained 1.2 percent to $12.88 in London, while Gazprom jumped 1.7 percent to $9.59. Magnit advanced 1.2 percent to $62.90 in London.
The Bloomberg-Russia-US gauge added 0.6 percent to 101.95 yesterday. The Market Vectors Russia ETF, the biggest U.S. exchange-traded fund that holds Russian shares, added 0.5 percent to $29.58.
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