Russian stocks fall dragged by drop in retailers’ shares

MOSCOW, Oct 23 (PRIME) -- Russian stocks decreased on Monday dragged by a decline in shares of retailers and oil prices remaining below U.S. $58 per barrel, analysts said.

The MICEX fell 0.39% to 2,063.81 and the RTS decreased 0.30% to 1,131.08.

“By the middle of the trading day main Russian stock indices MICEX and RTS are demonstrating an insignificant decline to levels of the previous close,” Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said.

The indices’ morning attempt to grow has failed, while at the same time the Russian market has no clear external drivers for reduction, he added.

Shares of retailer Magnit continued falling and lost 3.85% on Monday after the company said on October 20 that its net profit fell 53.27% on the year to 6.923 billion rubles in July–September, as calculated under International Financial Reporting Standards (IFRS), and lowered its revenue growth forecast for 2017 to 8–10% from 9–11%.

Otkritie Broker analyst Alexander Kochetkov said, “Securities of retail chains, which reacted to a weak report of Magnit at the end of last week, were unconditional outsiders of the day.”

Dixy lost 3.11% and M.Video decreased 1.79%, he said.

“There are almost no hopes for major growth in the sector left, as the population’s real incomes are clearly behind market expectations. By the way, Bank of America has significantly decreased a target price of Magnit’s shares and issued a “Sell” recommendation,” Kochetkov said.

Oil major Lukoil added 0.1% after reporting that its net profit increased 34.5% on the year to 107.92 billion rubles in January–September, as calculated under Russian Accounting Standards (RAS).

Uncut diamond giant ALROSA grew 0.05% after saying that its diamond output rose 6% on the year to 29.5 million carats in January–September.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Magnit	-3.85	8221.00	5.628
Sberbank	-0.33	192.34	5.175
Gazprom	+0.08	126.80	2.196
Norilsk Nickel	-0.22	10673.00	1.373
Lukoil	+0.1	2997.00	1.183

(57.5118 rubles – U.S. $1)

End