Russian stocks fall on privatization delay, Crimea terrorism worries

MOSCOW, Aug 19 (PRIME) -- The Russian stock market decreased on Friday because high oil prices did not fully offset investor worries that the government will postpone privatization of large companies and information on a terrorist threat in Crimea, analysts said.

The MICEX decreased 0.53% to 1,959.72 and the RTS fell 0.96% to 965.68.

“The trade dynamics of key securities is mostly negative. Although oil is trading above U.S. $50, the majority of securities in the oil and gas sector are in the red zone,” Georgy Vashchenko, director for operations on the Russian stock market at investment company Freedom Finance, said.

Investors are worried by the recent news that the government can raise foreign borrowing and abandon plans to privatize not only oil company Bashneft, but also Sovcomflot shipping company this year, Vashchenko said. There was no official comment, which is why the Russian market will not keep long positions for the weekend, he said.

The U.S. stock market decline is also a negative factor for the Russian market but stability of oil prices will not allow Russian assets to sag deeply, Vashchenko said.

Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said that last week’s news on a prevented terrorist attack in Crimea still keeps investors away from risky assets.

The fall of the RTS index was caused by weakening of the ruble, while the MICEX was mostly consolidating in on a narrow range Manzhos said.

The oil sector outperformed the market on growing oil demand because of possible market stabilization measures announced by Saudi Arabia, Alfa-Capital analyst Andrei Shenk said.

Manzhos said VSMPO-AVISMA rose 3.47% to 12,810 rubles on the news that the board of directors recommended paying 816 rubles per share in January–June dividends on the back of a net profit increase.

MTS shares are still under pressure after a release of poor financial and operating results for April–June, he said. MTS fell 1.4% to 236.65 rubles.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	–0.88%	135.8	5.799
Gazprom	–1.16%	136.8	2.094
Norilsk Nickel	+1.95%	9,788	1.365
Rosneft	–0.8%	349.05	1.250
VTB	–0.18%	0.067	1.023

(63.9391 rubles – U.S. $1)

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