BLBG:Most Russian Stocks Gain as Crude Oil Increase Boosts Rosneft
Most Russian (INDEXCF) equities increased as crude oil climbed while U.S. lawmakers prepared for talks to avert spending cuts and tax increases that threaten the economy of the world’s biggest crude consumer.
The 50-stock Micex Index added 0.2 percent to 1,475.79 by 3:45 p.m. in Moscow, with 32 stocks climbing, two little changed and 16 dropping. The gauge has added 5.3 percent this year. OAO Rosneft, Russia’s largest oil producer, advanced 0.8 percent. The stock has the fourth-largest weighting on the index at 6.1 percent. Preferred shares of oil producer OAO Surgutneftegas rose 0.8 percent.
Crude oil climbed 0.6 percent to $89.17 in New York. Russia receives about half of its budget revenue from the oil and gas industry. Democrats and Republicans plan to convene tomorrow for talks aimed at avoiding more than $600 billion in tax gains and spending cuts, known as the fiscal cliff, which are scheduled to take effect Jan. 1. European markets remain closed today for Christmas holidays, while U.S. markets will re-open.
“Today trading will be more of the same with no incentive to trade actively before there is more clarity on the fiscal cliff in the U.S.,” Slava Smolyaninov, an analyst at UralSib Capital, said in an e-mailed report.
The amount of shares traded on the gauge was 61 percent below the 10-day average, according to data compiled by Bloomberg. Failure to reach agreement would push the U.S. into recession for the first half of 2013, the nonpartisan Congressional Budget Office said.
Inter RAO, Uralkali
The country’s markets are closed for New Year and Christmas holidays in the first week of 2013, opening Jan. 8. The last day of trading this year is Dec. 28.
OAO Inter RAO UES jumped as much as 1.7 percent, gaining for the second day, and was up 0.3 percent at 2.54 kopeks after Vedomosti reported yesterday that President Vladimir Putin ordered the government to speed up state holding company Rosneftegaz’s acquisition of 40 percent of OAO Irkutskenergo, which belongs to Russia’s third-largest power producer. Irkutskenergo added 1.4 percent to 16.37 rubles.
Inter RAO’s stake is valued at about 50 billion rubles, Interfax reported yesterday, citing Boris Kovalchuk, Inter RAO’s chairman. This provides a 70 percent premium to current market valuations, VTB Capital’s analysts said in a note today.
OAO Uralkali, the largest potash producer by output, rose 0.7 percent to 236.90 rubles. Based on the Russian Federal Anti- Monopoly Service’s recommendations, the company will price domestic potash at a level not exceeding the minimum export contract price, Uralkali said in a statement today.
The RTS Index (RTSI$), Russia’s dollar-denominated equity gauge, increased 0.3 percent to 1,518.73. The Bloomberg Russia-US stocks (RUS14BN) measure dropped 0.5 percent to 97.02 on Dec. 24.
The Micex trades at about 5.4 times estimated earnings. That compares with a multiple of 10.6 times for the MSCI Emerging Markets Index, which has gained 14 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net
To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net
