Russia Stocks Climb 5th Day as Putin Calls for Ukraine Dialogue

The Micex Index advanced for a fifth trading session as Russian President Vladimir Putin called for a dialogue in Ukraine and investors bet the European Union’s latest sanctions won’t hurt the energy exporter’s economy.

The benchmark stock gauge added 0.6 percent to 1,383.84 by 11:15 a.m. in Moscow, as 40 stocks rose, seven fell and three were little changed. Preferred shares of OAO Rostelecom gained 2 percent after Vedomosti reported the company’s management proposed an 18 percent dividend increase on 2013 profit.

The EU added two companies and 13 individuals to the list of those sanctioned and made legal changes to allow expropriated companies in Crimea to be targeted. Putin and Didier Burkhalter, chairman of the Organization for Security and Cooperation in Europe, agreed on the need for talks in Ukraine after weekend referendums on independence in two eastern regions, the Kremlin said in an e-mailed statement yesterday.

“There’s a feeling that the situation won’t escalate,” Vladimir Bragin, head of research at Alfa Capital Partners Ltd. in Moscow, said by phone. “The question of eastern Ukraine regions joining Russia is off the table. Sanctions weren’t serious, more demonstrative.”

Putin and Burkhalter agreed on the need for more OSCE action to stabilize Ukraine, the Kremlin said.

Putin has been accused by the Ukrainian government and its allies of stoking separatist unrest. The self-styled Donetsk People’s Republic declared itself a sovereign state yesterday after saying 90 percent of voters backed breaking away from Ukraine on April 11. Separatists in neighboring Luhansk announced a similar move.

A vote of the same kind preceded Putin’s seizure of Crimea in March, a month after his ally in Kiev, President Viktor Yanukovych, was ousted in a popular uprising.

Russia’s state-controlled gas monopoly, OAO Gazprom, said yesterday Ukraine must pay for next month’s supplies by June 2 or face a shutoff the next day. The shares of Gazprom added 0.6 percent to 136.55 rubles today.

The nation’s equities trade at 4.7 times estimated earnings, the lowest valuation among 21 emerging markets tracked by Bloomberg.

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