Moscow Bourse in Worst Debut in a Year as Fed Sinks OilHalia Pavliva
The Moscow Exchange had the worst debut in a year among Russian companies that held initial share sales after oil, the nation’s biggest export earner, sank.
Shares of the bourse have lost 1.1 percent to 54.42 rubles in Moscow since pricing at 55 rubles in the Feb. 15 initial public offering. The exchange posted the steepest first-week decline of any Russian company that sold more than $10 million in an IPO since oil producer RusPetro Plc’s 4 percent slump last January, data compiled by Bloomberg show.
The IPO of Russia’s main stock and fixed-income exchange, the biggest in Moscow since 2007, came three trading days before minutes from the Federal Reserve ignited concern the U.S. central bank may curb the bond buying program that has supported commodities and emerging-market assets. Crude oil, which with natural gas makes up about 50 percent of Russian budget revenue, is down 3.4 percent this week, while the Standard & Poor’s GSCI raw materials index dropped to a one-month low yesterday.
“The stock was a victim of the Fed,” Ivan Manaenko, head of research at Veles Capital LLC in Moscow, said by phone yesterday. “The Fed signaled lower commodity prices and the stock plunged, together with the rest of the market.”
Russia’s 50-stock Micex Index rose 0.2 percent to 1,496.61 in Moscow today, paring a 0.8 percent drop in the week, the third weekly slump. Futures on Russia’s dollar-denominated RTS Index fell fell 0.1 percent to 154,770 by 12:28 p.m. in New York. The Moscow Exchange dropped 0.3 percent today.
Minutes from the Fed’s last meeting released Feb. 20 showed that policy makers were divided over the risks and benefits of the $85 billion in monthly asset buying designed to bolster the U.S. economy. Crude slipped 2.3 percent Feb. 20.
“Investors, especially foreign investors, don’t favor Russia, because it is correlated with commodities, particularly oil,” Anton Rakhmanov, chief executive officer at Sberbank Asset Management, which oversees about 80 billion rubles ($2.6 billion) said by phone from Moscow yesterday. “The IPO price was somewhat overstated. I won’t be surprised if the stock falls further in the near term.”
The Moscow Exchange’s $498 million offering priced at the bottom of its target range of 55 rubles to 63 rubles. The Kremlin-backed Russian Direct Investment Fund invested $80 million in the IPO and helped attract $200 million from other funds, Chief Executive Officer Kirill Dmitriev said Feb. 15.
There have been 43 IPOs globally in February, the least since June 2009 when there were 38 deals, according to data compiled by Bloomberg. Companies have raised $6.4 billion worldwide in initial share sales this month, the least since August, the data show. The Micex has lost 1.9 percent in February, after rallying in January and December.
RusPetro, a Russian oil and gas producer domiciled in the U.K., has lost 72 percent since its IPO in London. OAO MegaFon, the phone company whose $1.7 billion IPO in November was the biggest initial offering by a Russian company in three years, has climbed 31 percent in Moscow since it first started trading. The shares have gained 39 percent in London.
Oil fell to the lowest level this year in New York yesterday and was 0.2 percent lower at $93.01 a barrel in New York today. Brent oil added 0.5 percent to $114.14, paring a 3 percent weekly drop in London. Urals crude, Russia’s chief export blend, is down 3.9 percent this week.