Novatek Advances on China Deal as Russian Stocks Extend StreakVladimir Kuznetsov
Russian stocks extended their longest winning streak in more than three years to an eighth day after crude oil rose. OAO Novatek climbed after Chinese banks agreed to finance its Yamal LNG project.
OAO Lukoil was the largest contributor to gains on the index, rising 0.6 percent. Novatek, the country’s biggest non-state gas producer, advanced 1.2 percent to 391.40 rubles a share. OAO GMK Norilsk Nickel led declines, falling 2.3 percent to 4,608 rubles, as it sought to allay concerns it may spend its cash buying shares in the world’s biggest potash producer.
The Micex Index rose less than 0.1 percent to 1,454.12, the highest since March 21, at the close in Moscow. It extended its recovery from this year’s low on June 13 to 13 percent.
“Investors are pausing for a breather,” Luis Saenz, head of sales and trading at BCS Financial Group in London said by e-mail. “The Moscow Exchange had been up seven days in a row so barely gained today.”
The 14-day relative strength index closed at 71 today, its third day above 70, the level at which some analysts say an index or stock is overbought and poised to decline.
Novatek, controlled by billionaires Gennady Timchenko and Leonid Mikhelson, signed an accord with China National Petroleum Corp. and Chinese banks on project financing for the Yamal LNG project, which plans to sell liquefied natural gas in Asian markets, according to a statement from the companies yesterday. CNPC has agreed to acquire a 20 percent stake in the project.
This is “yet another step forward for the ambitious Yamal LNG project contributing to its de-risking process we’ve been highlighting,” Saenz said in e-mailed comments.
Brent rose today from its lowest level in two weeks on concern that the U.S. could return to talk of a military strike against Syria. President President Barack Obama delayed a decision yesterday to pursue Russia’s proposal for the Middle Eastern country to hand over chemical weapons.
Lukoil closed up 0.6 percent at 2,026 rubles, the highest level since March 23.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg, with shares trading at 3.9 times 12-month estimated earnings, compared with a multiple of 11.4 for the MSCI Emerging Markets Index.
Norilsk snapped eight days of gains, which took the stock to the highest since the end of July, after a report that it’s among those interested in buying a stake in OAO Uralkali. The metals producer has held no talks and has no intention to bid, Larisa Zelkova, a Norilsk spokeswoman, said today. The board will review the company’s strategy tomorrow.
“People are afraid they might buy Uralkali,” Yulia Bushueva, a money manager at Arbat Investment Services Ltd. in Moscow, said in e-mailed comments. Billionaire Oleg Deripaska, the chief executive officer of United Co. Rusal, which is a Norilsk shareholder, said today on Bloomberg Television that the nickel producer will stick to its plan to pay dividends.
Uralkali dropped 0.5 percent to 186.11 a share, extending its decline this year to 21 percent.