RTS Futures Fall on Growth as Oil Jumps: Russia OvernightHalia Pavliva
Russia’s stock futures slumped on concern that a surge in oil prices will crimp global economic growth at a time when the country is scaling back forecasts for its own expansion.
Futures on the RTS Index expiring in September lost 0.7 percent in U.S. hours. The Bloomberg-Russia-US Equity Index of the most-traded Russian stocks in the U.S. slid the most in three weeks, led by Yandex NV, Russia’s largest search engine. OAO Gazprom Neft, the oil arm of the nation’s natural-gas exporter, increased 2.8 percent. Qiwi Plc,, which operates an electronic payment service, rose to the highest price in almost four months after boosting its earnings and sales forecasts.
Oil jumped to an 18-month high in New York yesterday on speculation that tension in Syria will disrupt Middle East supplies. The rally intensified concern global expansion will slow as China’s economy levels off amid a looming recession in Europe. Russia, the world’s largest energy exporter, cut its 2013 growth forecast for the second time this year on Aug. 26 after the economy unexpectedly slowed.
“Higher oil prices may lead to slower growth,” Ivan Manaenko, the head of research at Veles Capital, said by phone from Moscow yesterday. “That longer-term view at the moment outweighs an immediate positive impact from higher energy prices for Russia.”
West Texas Intermediate crude for October delivery rose 2.9 percent to $109.01 a barrel on the New York Mercantile Exchange. It was the highest settlement since Feb. 24, 2012. Foreign Minister Walid al-Muallem said that Syria’s defenses will “surprise” the world should the U.S. and its allies attempt military strikes.
Russia lowered its 2013 economic-growth forecast to 1.8 percent from 2.4 percent, Deputy Economy Minister Andrey Klepach said earlier this week. Bank of America Corp. cut the nation’s gross domestic product growth outlook yesterday to 2.5 percent, citing weak second-quarter data.
The Bloomberg Russia-US gauge slumped 1.2 percent to 90.79. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, fell 1.5 percent to $25.89. The RTS Volatility Index, which measures expected swings in the stock futures, declined 0.5 percent to 23.69 in U.S. hours.
Yandex, which got all of its revenue from Russia last year, fell 3.3 percent to $32.14, the lowest level since July 29. The slump trimmed this year’s advance to 49 percent.
Gazprom Neft jumped to $19.80, almost wiping out its discount to the shares in Moscow. Russian producers will benefit from higher energy prices, Daniloff Capital LLC said.
“While Russia’s political risks have been already priced in, stronger oil price should help push equities higher,” Ilya Kravets, director of investment research at Daniloff Capital, said in a telephone interview from New York yesterday.
Qiwi surged 2.6 percent to $34.33, more than double its U.S. initial public offering price in May. Trading volume was twice the average of the last 90 days, according to data compiled by Bloomberg. The company reported second-quarter earnings of 32 cents a share, beating the mean estimate of four analysts by Bloomberg by 45 percent. JPMorgan Chase & Co. raised the stock to the equivalent of buy from neutral.
OAO Sberbank, the nation’s biggest lender, fell 0.6 percent to $10.79 in New York yesterday, the lowest level since Nov. 14, settling at a 0.7 percent discount to the company’s Moscow-listed stock. The bank reports its second-quarter earnings today.