Most Russian Stocks Advance Led by Novatek as Ruble SinksZahra Hankir
Most Russian equities gained, led by OAO Novatek, as a weakening ruble boosted the value of energy exports.
The benchmark Micex Index was little changed at 1,514.78 by the close in Moscow, with 31 stocks rising and 19 retreating. Novatek, the country’s second-largest natural gas producer, added 2.3 percent and OAO Uralkali, the world’s biggest potash supplier, increased 4.4 percent.
The depreciating ruble is boosting the proceeds of Russian energy companies in local-currency terms even as crude oil extended losses in a bear market and fell to the lowest in four years today. The ruble slumped 1.4 percent to 46.4765 versus the dollar as of 7:19 p.m. in London today and is down 29 percent this year, the worst performance among 24 emerging-market peers tracked by Bloomberg.
“One would expect the ruble correlation to the oil price to increase significantly as the central bank targets inflation instead,” Emad Mostaque, a London-based strategist at Ecstrat Ltd., said by e-mail today. “If oil now finds a floor near current levels, we could see the market recover some lost ground in US dollar terms.”
The dollar-denominated RTS Index fell 1.6 percent to 1,028.95. The Micex trades at 4.9 times projected 12-month earnings, compared with 11 times for the MSCI Emerging Markets Index.
Russia’s central bank yesterday cut the growth forecast in its main outlook for 2015 to zero and pushed back its estimate for meeting an inflation target of 4 percent by one year from 2016.