Russia Stocks Fall to Five-Year Low on Oil as Sberbank Retreats

Russia’s dollar-denominated stocks index declined to five-year low as the ruble slid and Brent crude retreated further into a bear market.

The RTS Index slid 4.2 percent to 870.37 by the close in Moscow, the lowest since July 2009. The benchmark Micex Index fell 3.1 percent to 1,481.27, the lowest since Oct. 30. OAO Sberbank, the nation’s biggest lender, lost 4.8 percent, to the lowest price since October 2011, after Bank of America Merrill Lynch cut the stock’s rating. AFK Sistema tumbled 14 percent.

“Oil continues to decline and this is pressuring the ruble and the RTS,” Vitaly Kupeev, an analyst at Allianz Investments in Moscow, said by phone. “Shares of lenders are always sensitive to the ruble and to economic concerns.”

The ruble weakened 2.2 percent against the dollar, extending this year’s drop to 39 percent, the worst performance among the 24 emerging-market currencies tracked by Bloomberg. Penalties imposed on Russia over its role in the conflict in eastern Ukraine have exacerbated a slump in the economy, which is predicted by the government to fall into a recession next year. Brent declined 3.5 percent. Russia receives about half of its budget revenue from oil and natural-gas industries.

Sberbank Rating

Sberbank fell 4.8 percent to 65.30 rubles. Bank of America lowered its recommendation on the stock to neutral from buy, citing a “challenging” year ahead for Russian banks. A weaker ruble encourages Russians to withdraw and convert local-currency deposits, Sberbank’s main source of funding.

AFK Sistema dropped to 7.70 rubles, the lowest price since April 2009. OAO Mobile TeleSystems retreated 4.7 percent to 212 rubles. A court ruling on transferring 71.6 percent of OAO Bashneft shares from Sistema to the state takes effect at midnight, Vladimir Ryzhov, spokesman for the Federal Agency for State Property Management, said in an e-mail.

Sistema fell 30 percent last week, the fifth week of losses. Russia continues to consider the claim against Sistema on recouping 190 billion rubles ($3.6 million) of past Bashneft dividends, Interfax reported on Dec. 3, citing unidentified people with knowledge of the matter.

“Sistema’s shares are under renewed pressure in light of reports that Russia continues considering demanding Bashneft dividends,” Vitaly Isakov, a portfolio manager at Otkritie Asset Management in Moscow, said by e-mail. “MTS is falling on this as well as Sistema may be forced to sell it in order to pay for the demands.”

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