Russian stocks rise on oil price, sanctions hopes

MOSCOW, Jan 16 (PRIME) -- Russian stocks grew on Friday on rebounding oil prices and hope for a gradual lifting of Western sanctions, analysts said.

The MICEX rose 1.81% to 1,591.43 and RTS increased 0.97% to 769.80.

“As we have seen in the past couple of months, the RTS index has been trading at about 16 ratio to the Brent oil price; and the rising oil price provided some sort of stability to the currency market and returned investors’ appetite to the index,” Ilya Frolov, analyst at Promsvyazbank, said.

The Brent oil price grew 2.955% to U.S. $49.70 per barrel as of 6.56 p.m. Moscow time.

Rising oil prices pushed shares of oil companies up, and the sector dragged the whole market higher. Lukoil rose 4.47% to 2,736 rubles, oil major Rosneft increased 2.77% to 226 rubles, preferred shares of oil companies Surgutneftegas and Bashneft also grew 4.36% to 34.25 rubles and 1.75% to 986 rubles.

Timur Nigmatullin, analyst at Finam, said a report by the Wall Street Journal about a January 19 meeting between E.U. foreign ministers to discuss splitting Russian sanctions into parts that could be lifted separately, also encouraged the market.

The market waited for S&P to revise Russia’s rating to junk, but the agency said it will publish its decision until the end of January. However, analysts said that a downgrade will not deal a significant blow to Russian stocks.

Frolov said that the S&P downgrade is a significant risk only for the debt market, while for the stock market the MSCI’s decision not to rebalance MSCI Russia Index is more important.

“Many players are already sure that Russia will not avoid a junk rating, at least by S&P, and that is why this outcome has already been priced in. The reaction may be limited,” Andrei Dirgin, analyst at Alfa-Forex, said.

Biggest lender Sberbank looked weaker than the market, gaining only 0.31% to 61.99 rubles, as the bank’s net profit fell 22.1% as calculated under Russian Accounting Standards.

Electronic goods retailer M.Video lost 2.22% to 132 rubles despite strong operational results: in December 2014 alone the company’s sales surged 73% on the year to 43 billion rubles, while in October-December 2014 its sales soared 52% to 70 billion rubles.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	+0.31	61.99	8.789
Gazprom	+1.77	149.60	4.847
Lukoil	+4.47	2736.00	2.948
Magnit	+0.41	11350.00	1.770
VTB	+3.97	0.06522	1.748

(64.8337 rubles – U.S. $1)

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