Russian Grids, Mechel, NLMK Tumble on MSCI Removal: Moscow Mover

OAO Russian Grids, OAO Novolipetsk Steel and OAO Mechel dropped after MSCI Inc. excluded the stocks from its Russia Index.

Russian Grids was removed from the index along with Novolipetsk’s GDRs and Mechel’s ADRs as part of MSCI’s semi-annual rebalancing, according to a statement after the market close yesterday. Funds that track the MSCI indexes readjust their portfolios based on the changes, which take effect June 3.

“Being excluded from MSCI is not positive for these stocks,” Sergey Fundobny, head of research at Arbat Capital, said by phone from Moscow. “This is driving their declines.”

Russian Grids, formerly known as MRSK Holding, slumped 9.3 percent to 1.233 rubles in Moscow, the most since May 2012. The amount of shares traded was 4.7 times above the three-month average. Novolipetsk fell for a fourth day, losing 4.9 percent to 45.47 rubles, the most since May 2012, while its global depositary receipts declined 4.7 percent to $14.50.

Mechel, Russia’s biggest coking coal producer, dropped 2.8 percent to 113.10 rubles, the lowest since February 2009, while its American depositary receipts retreated 1.4 percent to $3.63.

Russian Grids lost 42 percent over the last 12 months, while NLMK’s GDRs have tumbled 13 percent and Mechel’s ADRs have retreated 43 percent.

OAO PhosAgro, the largest European phosphate-fertilizer producer, declined 4.9 percent to 1,277.70 rubles. The GDRs sank 5 percent to $13.62. VTB Capital and Sberbank Investment Research expected PhosAgro’s GDRs to be added to MSCI Russia after PhosAgro’s controlling holders, Andrey Guryev and his family, sold a 9 percent stake in the fertilizer producer in April to gain entry to the index.

RusHydro Sinks

“Rather surprisingly, PhosAgro was not included” in the gauge, Sberbank CIB’s analyst Iskander Abdullaev, said in an e-mailed note.

OAO RusHydro, Russia’s biggest renewable energy producer, retreated 5.8 percent to 51.50 kopeks in Moscow, the most since June 2012. The GDRs declined 4.9 percent to $1.598. MSCI cut the stock’s weighting in the Russia Index to 0.79 percent, according to the report.

OAO Gazprom, Russia’s biggest company and natural gas export monopoly, increased as much as 2.1 percent before closing up 0.3 percent at 122.79 rubles. The stock’s weighting was lifted to 21.8 percent, according to MSCI’s note. The GDRs gained 0.7 percent to $7.825 in London.

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