Tags: Russia | Micex | stocks | Ukraine

Russia's Micex Jumps to 9-Month High on Ukraine as Gazprom Gains

Tuesday, 08 July 2014 07:09 AM

The Micex Index rose to a nine-month high after Ukrainian forces recaptured rebel strongholds and investors bet Russia won’t intervene in the conflict.

The equities gauge added 1 percent to 1,528.93 by 2:09 p.m. in Moscow, the highest level since Oct. 22. OAO Gazprom, the nation’s biggest gas producer, increased 1.8 percent and OAO Lukoil gained 0.7 percent. OAO Sberbank, the largest lender, rose 0.5 percent. The three stocks comprise more than 40 percent of the gauge’s weighting, data compiled by Bloomberg show.

The Micex has rallied 24 percent from this year’s trough on March 14, the last trading day before Crimea’s referendum on joining Russia. Ukraine’s army achieved the biggest victories of a three-month campaign in the past few days, retaking the towns of Slovyansk and Kramatorsk. Pro-Russian rebels have fled to Donetsk and Luhansk, where they’ve vowed to make a stand.

Today’s advance is “a reaction to Russia not trying to intervene in the events in south-east Ukraine,” Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by e-mail. “Everybody was afraid of Russia intervening and now it’s clear that there won’t be any further participation.”

Representatives of the 28 European Union governments met in Brussels yesterday and agreed sanctions could be applied as soon as tomorrow to more Russian individuals they accuse of backing the insurgency.

“It looks like sanctions aren’t scaring anyone anymore,” Bit-Avragim said.

The Micex trades at 5.6 times estimated earnings, making it the cheapest measure among 21 emerging markets tracked by Bloomberg. That compares with a multiple of 5.3 percent at the end of February, before Russia’s incursion in Crimea. The dollar-denominated RTS Index added 1.4 percent to 1,404.95.

UBS AG raised its recommendation for Russia to neutral, citing better-than-expected growth in the second quarter and cheap valuations, strategist Geoff Dennis said in an e-mailed emerging-markets report dated yesterday.

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The Micex Index rose to a nine-month high after Ukrainian forces recaptured rebel strongholds and investors bet Russia won't intervene in the conflict.
Russia, Micex, stocks, Ukraine
Tuesday, 08 July 2014 07:09 AM
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