Russian stocks rise on guarded Moscow stand on Donetsk secession

MOSCOW, May 13 (PRIME) -- The Russian stock market grew on Tuesday as the Kremlin’s guarded comment regarding the secession of the Donetsk region from Ukraine issued on Monday allowed investors to hope for mild or no further sanctions against Moscow, analysts said.

The MICEX rose 0.73% to 1,385.29 and the RTS increased 1.62% to 1,254.29.

“The current increase (of the domestic market) was possible due to a quite restrained Russia’s comment on the outcome of the Donetsk and Luhansk’s self-determination referenda. Meanwhile, the People’s Republic of Donetsk is still waiting for Russia’s reply to the petition to become its territory,” Nord Capital analyst Vitaly Manzhos said.

The OSCE has begun taking steps under the Ukrainian crisis pacifying roadmap, which make investors believe that the conflict will deescalate to a certain degree soon, BCS Express analyst Ivan Kopeikin said.

France’s reluctance to forego supplying Mistral helicopters to Russia signals that the European leaders have an ambiguous position towards further sanctions against Moscow, which is a bullish factor for domestic traders, Manzhos said.

Brent oil price growth by over U.S. $108 was one of the triggers of the Russian market growth, Kopeikin said.

Sberbank’s shares grew as the ruble strengthened against the U.S. dollar, Manzhos said.

Gazprom’s shares were benefiting from the news that Russia and China will sign a gas supply contract on May 20, Manzhos said.

Oversold retailer Magnit regained momentum as investors wanted more exposure to Russian assets. “It was quite unfair that Magnit, one of the most prominent Russian market investment stories, lost 16% since January 1, while the Moscow Exchange had only an 8% loss. Magnit rebounded on Tuesday on a positive background,” Dmitry Mikhailov, a portfolio manager at Alfa-Capital, said.

Lukoil lost 0.97% to 1,931.3 rubles, with its positions being spoiled by the growing ruble exchange rate as the company gets a great share of its revenue in the U.S. dollars. “The stocks of Lukoil and other oil companies were protective stocks when the ruble was weakening but now investors prefer second-tier companies as they see more sense in the risk,” Mikhailov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	+1.35	80.15	14.983
Gazprom	+2.03	138.46	7.315
VTB	+1.36	0.04480	6.068
Magnit	+2.33	7900.00	2.237
Sberbank prefs	+2.86	69.11	1.873

(35.2091 rubles – U.S. $1)

End