Micex Rises as Sistema Rallies With Bashneft on Court Optimism

Russian stocks extended the longest winning streak since August as AFK Sistema climbed after prosecutors said they wouldn’t widen claims against the company and OAO Magnit rose on a dividend announcement.

The Micex Index climbed 0.9 percent to 1,452.89 at the close in Moscow, gaining for a fifth day after earlier dropping 0.8 percent. Sistema jumped 12 percent, paring an advance of as much as 17 percent. OAO Bashneft, which Sistema controls, added 10 percent for its biggest advance since the stock began trading in 2011. OAO Magnit increased 1.5 percent after the retailer recommended paying an interim dividend.

While investigators petitioned to sue Vladimir Evtushenkov’s Sistema for $4.75 billion of “illegal” dividends received from oil production unit Bashneft, prosecutors didn’t pursue the demand. A Moscow court later ruled in favor of nationalizing Sistema’s stake in Bashneft. Sistema said it is considering appealing against the judgment.

“Investors priced in the Bashneft nationalization,” Vladimir Vedeneev, the chief investment officer at Raiffeisen Capital in Moscow, said by e-mail. “Many are taking the news that prosecutors didn’t broaden demands on dividends as a positive.”

Earlier, prosecutors argued every transaction in the shares since they were sold by the state was illegitimate.

Volatile Session

Magnit climbed to a record in Moscow and a three-month high in London after the company’s board recommended paying an interim dividend of 152.07 rubles ($3.63) per share.

Evtushenkov has been under house arrest since Sept. 16 in relation to a money laundering investigation linked to Sistema’s purchase of Bashneft shares. The billionaire, who maintains his innocence, is the richest Russian to face criminal charges since Yukos Oil Co. founder Mikhail Khodorkovsky was detained more than a decade ago.

OAO Megafon, Russia’s second-largest wireless operator, dropped 0.3 percent as quarterly sales expansion slowed amid a sputtering economy in its home market. CEO Ivan Tavrin said the company won’t pay an interim dividend this year.

The ruble surged as much as 5.1 percent to 41.0005 per dollar, the biggest daily increase in Moscow Exchange data going back to 2003. Traders are reducing short positions before the Bank of Russia’s rate decision tomorrow, according to Denis Korshilov at ZAO Citibank in Moscow.

“It is an extremely volatile and nervous session, which is likely to extend at least until we know the decision of the central bank tomorrow,” Slava Smolyaninov, chief strategist at UralSib Financial Corp. in Moscow, said by e-mail.

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