Micex Rises as Sberbank Rebounds, Novatek Gains on Upgrade

Russian stocks climbed as OAO Sberbank rebounded from losses triggered by its inclusion in a list of sanctioned companies and OAO Novatek jumped after Bank of America Merrill Lynch raised the stock to buy.

The Micex Index climbed 0.6 percent to 1,462.94 by 12:29 p.m. in Moscow. Sberbank, the nation’s biggest lender, added 1.3 percent, while Novatek rose 1.6 percent. The ruble fell 1 percent per dollar, extending its slump to 15 percent this year.

Sberbank retreated 1.3 percent yesterday after the U.S. on Sept. 12 expanded sanctions against Russia over the Ukraine conflict to include the lender. BofA analysts upgraded Novatek, citing alternative financing available to the Yamal liquefied natural gas project even amid tougher penalties on Russian financial and energy companies, according to an e-mailed note.

“Peope sold off Sberbank as the key play on the effect of sanctions and the weakening ruble, and today the stock is rebounding,” Stanislav Kopylov, a money manager at UralSib Asset Management, said by phone from Moscow. “All eyes are on the ruble and the main beneficiaries of the weakness are export-oriented companies.”

The sanctions are exacerbating a slowdown in an economy on the brink of a recession. Gross domestic product will grow 0.5 percent this year, the slowest since a 2009 contraction, the Economy Ministry predicts.

ETF Flows

“Should the situation in Ukraine stabilize, we believe Novatek should be the one of the most-levered names to potential upside,” BofA analysts led by Karen Kostanian said in the note.

Russia’s U.S.-based exchange-traded funds had $13.3 million of inflows yesterday, according to data compiled by Bloomberg.

The Micex has climbed 4.5 percent this month on optimism a peace plan brokered by Russia and Ukraine will hold. The conflict in Ukraine has killed at least 3,000 people and driven relations with the U.S. and Europe to a post-Soviet low.

Sixty-two percent of stocks in the Micex traded above their 50-day moving average yesterday, according to data compiled by Bloomberg. The gauge is valued at 5.1 times estimated earnings, compared with a multiple of 11 for the MSCI Emerging Markets Index.

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