Russia’s Micex Rallies for 4th Day Led by Gazprom on ValuationsPriyanka Sharma
Russian stocks rose for a fourth day, the longest rally in two months, led by OAO Gazprom and OAO Lukoil as the lowest valuations among emerging markets attracted investors.
The benchmark Micex index advanced 1.8 percent to 1,398.85 at the close in Moscow, the highest level since July 24. Gazprom, Russia’s largest natural-gas producer, added 2.3 percent. Forty-four stocks gained, five dropped and one was unchanged. The number above their 50-day moving average was 16 yesterday, up from a four-month low of 10 on Aug. 7.
The Micex has retreated 3.2 percent since the end of February, before Russia’s incursion into Ukraine’s Crimea peninsula. The measure last traded at 5 times estimated earnings, compared with a multiple of 5.3 before the invasion and making it the cheapest market among developing nations.
“Stocks are still cheap,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said by e-mail. “More investors are realizing that one day, the crisis will be over and good opportunities to buy will be over too.”
Russia sent 280 trucks carrying food, medicine and water for rebel-held regions in Ukraine yesterday even as the government in Kiev expressed concern the convoy is transporting military equipment to assist the separatists.
Gazprom, trades at 2.7 times estimated earnings, the lowest among its 15 major peers worldwide. The shares rose to 131 rubles,the strongest close since Aug. 1. Lukoil, the second-cheapest stock at a multiple of 4.1, gained 1.1 percent.
OAO Sberbank, the nation’s biggest lender, climbed 2 percent to the highest since July 25. VTB Bank advanced 2.1 percent.
The two banks “lost on sanctions quite a lot, but revoked sanctions could trigger them easily back to pre-crisis levels,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said by e-mail.
OAO Mobile Telesystems, Russia’s biggest mobile operator, rose 2.8 percent to the highest level since July 17, taking the five-day gain to 7.7 percent.
“There may be some support ahead of 2Q14 numbers to be released next week, which most likely confirm the ability to generate fairly strong cash flows,” Konstantin Belov, an analyst at UralSib Capital in Moscow, said by e-mail.
The dollar-denominated RTS Index increased 1.8 percent to a two-week high.