MET increase possibility once again drags Russian stocks down

MOSCOW, Sep 24 (PRIME) -- Russian stocks decreased on Thursday once again being dragged down by the government’s discussion of a possible increase of the mineral extraction tax (MET) on oil, analysts said.

The MICEX fell 1.17% to 1,621.43 and the RTS decreased 1.62% to 769.38.

“Only talks over increasing the MET for oil companies, even without a clear understanding whether it would be implemented, provoked a wave of sales not only in the energy resources segment, but in other sectors as well,” Sofya Kirsanova, an analyst at managing company Raiffeisen Capital, said.

The toughening of the oil sector’s tax burden is an unwelcomed but necessary measure to balance the budget for 2016. The discussion will continue until late October, and it will create additional volatility at the market until then, Kirsanova said.

“Market participants fear that the government may increase a fiscal burden not only on the oil sector, but on a vast range of commodities’ companies in order to finance the budget deficit,” Timur Nigmatullin, an analyst at investment company Finam, said.

Another blow for the market was made by the central bank’s First Deputy Chairwoman Ksenia Yudayeva saying that the Russian economy may contract further for a few more quarters. Taking into account bad macroeconomic statistics, with industrial output falling 4.3% on the year in August and annual inflation standing at 15.8%, there are few reasons to be optimistic, Igor Kovalyov, an analyst at InstaForex, said.

Norilsk Nickel was one of the day’s losers falling 5.27% after the dividend cut-off, as on Friday the company will close register for January–June dividends.

Airline Transaero plunged 20% due to an upcoming merger with national flag carrier Aeroflot.

The Moscow Exchange outperformed the market and grew 0.51% after the bourse’s supervisory board approved raising minimum dividend payout to 55% of net profit under International Financial Reporting Standards (IFRS) from 50%.

Below are the MICEX’ five most active stocks on Thursday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.56	73.33	7.474
Lukoil	-0.82	2185.00	5.552
Norilsk Nickel	-5.27	9662.00	5.314
Gazprom	-1.56	132.20	5.019
Surgutneftegas prefs	-2.62	39.45	1.957

(66.0410 rubles – U.S. $1)

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