Russian stocks fall on fears of cheap business sales

MOSCOW, Apr 14 (PRIME) -- The Russian stock market decreased, and the shares of gold producer Petropavlovsk dove 16.56%, as the market participants feared that more companies could start to consider selling parts of their business at low prices following the case of Petropavlovsk, analysts said.

The MOEX Russia Index fell 4.89% to 2,404.73, and the RTS index decreased 5.62% to 941.05.

"The Russian stock market fell in the first half of the day. Only the preferred shares of Surgutneftegas demonstrated growth among the shares of the index (fell 1.17% at end of the session). Petropavlovsk’s decision to sell its Russian assets creates a precedent for other Russian companies with businesses in Russia and abroad," Otkritie Research leading analyst for global research Andrei Kochetkov said.

Petropavlovsk is studying all variants of action, including a fast sale of the entire stake in the operating affiliates. The company has a U.S. $200 million loan and an $86.7 million revolving credit lines with Gazprombank and cannot fulfill its obligations to the bank due to sanctions on Gazprombank, Kochetkov said.

The split of business or its sale might become a solution that will be copied by the other companies. In the current situation, the sale would take place at low prices, he said.

Veles Capital analyst Yelena Kozhukhova said that the Russian market ignored a moderately optimistic mood abroad due to another round of sanctions against the country earlier on the week.

According to Kochetkov, the oil prices fell after sales from the U.S. strategic reserves.

The oil and gas sectors and the metals producers were among the outsiders, Kochetkov said. Magnitogorsk Iron and Steel Works (MMK) lost about 2.5% after suspending publication of operating and financial reports with the executives saying that this was because most investors could not manage their stakes in MMK. The security continued decreasing, closing with a 4.67% fall.

Competitors Severstal (-3.73%) and Novolipetsk Steel (NLMK) (-3.10%) might follow suit.

Below are the MOEX Russia Index’ five most active stocks on Thursday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-4.76	129.05	5.853
Gazprom	-5.43	222.11	4.992
Mechel	-5.93	120.1	1.338
Yandex	-6.84	1945.2	1.024
Lukoil	-4.44	4879.5	0.990

(79.8471 rubles – U.S. $1) 

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