Russia Stocks Slide to Two-Week Low as Pharmstandard Sales Fall
Russian stocks dropped to a two-week low as oil, the country’s main export earner, erased gains and OAO Pharmstandard tumbled after revenue fell.
The Micex Index (INDEXCF) slid 0.5 percent to 1,500.24 by 1:19 p.m. in Moscow, the lowest since Oct. 10. OAO Rosneft retreated 1.4 percent to 251.01 rubles. Pharmstandard lost 2.8 percent to 1,740.50 rubles, the biggest decliner on the gauge, after posting an 18 percent sales drop in the third quarter from a year earlier.
The Micex pared its advance from this year’s June low to 17 percent. Brent crude erased gains of 0.4 percent to trade little changed at $107.77 in London. Russia receives about half its budget revenue from natural gas and oil. Euro-area services and manufacturing output unexpectedly slowed in October, London-based Markit Economics said today.
“The fact that European PMI came out weaker than expected isn’t very good news as the Russian market tends to reflect everything that’s going on in the world,” Vadim Bit-Avragim, who helps manage about $4.4 billion at Kapital Asset Management in Moscow, said by phone. “Russian stocks are very closely tied to the oil prices and we’re starting to see a correction. Rosneft is a leader of the retreat, it’s very sensitive to the oil price.”
Rosneft lost 1.3 percent to $7.865 in London. Oil producer OAO Surgutneftegas sank 1.9 percent to 28.318 rubles.
OAO Transneft tumbled 2 percent to 82,896 rubles. Russia’s state-run oil pipeline operator is considering a second pipeline to Asian markets to counter a capacity deficit via the East Siberia-Pacific Ocean crude oil channel, Chief Executive Officer Nikolay Tokarev said today.
Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the Micex trading at 4.3 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 rose to 15.909 from 15.775 yesterday.
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