Tags: Micex | Russia | energy | shares

Micex Declines Led by Russian Energy Shares as Inter RAO Slumps

Monday, 14 Jul 2014 08:41 AM

The Micex Index retreated as OAO Lukoil traded without the right to its dividend payment and OAO Inter RAO UES slid the most since April.

The gauge lost 0.7 percent to 1,488.09 by 3:21 p.m. in Moscow after rising 0.7 percent last week. Lukoil, the nation’s second-biggest oil producer, fell 3.6 percent before adjusting for the payout and 0.7 percent after. Inter RAO slumped 4.5 percent after saying July 11 OAO Vnesheconombank will exercise a put option the power company can’t pay for without state aid.

Energy shares dropped 1.6 percent on average on the Micex, the biggest decline among nine industry groups. Some stocks have come under pressure in the past month as companies distribute dividends. Lukoil has a 14 percent weighting on the gauge, the second-biggest. Inter RAO said it may need government aid or to sell its stake in OAO Irkutskenergo to buy back 31.4 billion rubles ($918 million) of its shares from Vnesheconombank.

“Technically and psychologically, dividend cut-off dates are pressuring energy shares,” Aleksei Belkin, who helps manage about $4 billion as chief investment officer at Kapital Asset Management LLC in Moscow, said by phone.

OAO Gazprom’s dividend cutoff date is July 16, while that of OAO Surgutneftegas is July 15, according to data compiled by Bloomberg. The dollar-denominated RTS Index lost 1.4 percent to 1,364.43. The decline on the Micex today trimmed the index’s advance this month to 0.7 percent.

TMK Gains

On July 11, the gauge entered a bullish technical formation known as the golden cross, which occurs when a security’s short-term moving average breaks above its long-term moving average. The index’s 50-day moving average rose to 1,448.99, above the 200-day moving average of 1,444.26, data compiled by Bloomberg show.

OAO TMK, the world’s largest pipe producer by output, gained 1.8 percent to 85 rubles. The stock is rising after a U.S. ruling to impose duties on steel pipe imports, which didn’t include Russia, according to Moscow-based Deutsche Bank AG analyst George Buzhenitsa.

“The final determination is an important positive development for the North American pipe producers,” Buzhenitsa said in an e-mailed note. The ruling is “one of the key drivers for TMK, given the importance of the American business for the company’s margins recovery and free cash flow profile.”

OAO Magnit, the nation’s biggest food retailer, added 0.6 percent to a record, rising for the sixth day. OAO Dixy Group advanced 0.5 percent.

Retail Stocks

Retail stocks are gaining on “good operational results, rising sales against the backdrop of food inflation,” Anton Kravchenko, a portfolio manager at Raiffeisen Capital in Moscow, said by e-mail. The shares are also rising on expectations of “good” financial results, he said. Magnit is scheduled to publish earnings on July 23.

OAO Mechel, the nation’s biggest coking coal producer, climbed as much as 8.1 percent before trading up 6.5 percent at 41 rubles. The stock had lost 25 percent in the previous four trading days. Chief Executive Officer Oleg Korzhov on July 11 said the company’s bankruptcy isn’t in anyone’s interest and called for a compromise and a restructuring of its debts.

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The Micex Index retreated as OAO Lukoil traded without the right to its dividend payment and OAO Inter RAO UES slid the most since April.
Micex, Russia, energy, shares
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2014-41-14
Monday, 14 Jul 2014 08:41 AM
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