Russian stocks sink on technical correction, ruble’s fall

MOSCOW, Apr 17 (PRIME) -- Russian stocks plunged on Friday in a technical correction after several days of growth mainly due to falling ruble’s exchange rate, analysts said.

The MICEX fell 1.79% to 1,656.59 and RTS decreased 5.90% to 998.96.

“Today was a payback day for the stock indices as several days of continuous growth are just unallowable for Russian benchmarks in actual conditions, so it is not a surprise that they began trading in the red zone and only sank deeper in the second half of the day; a very logical technical correction took its share,” Natalya Samoilova of Golden Hills-Capital said.

Such a strong driver for growth as a strengthening ruble has run out even despite oil prices have been trying to stabilize above U.S. $64 per barrel, Instaforex’ analyst Anton Fomin said.

As of 6.33 p.m. Moscow time, the ruble plunged 2.3450 rubles against the U.S. dollar to 52.1450 and 2.68 rubles against the euro to 56.23.

The ruble was falling not only due to the fact that oil prices stopped rising, but also due to Central Bank Chairwoman Elvira Nabiullina’s words that the ruble’s strengthening may allow the regulator to decrease its key rate at the next meeting scheduled for April 30, Finam’s analyst Timur Nigmatullin said.

“Considering a recent increase in a rate of foreign currency-denominated repo deals, the pressure on the ruble will be significant,” Nigmatullin added.

Power holding Inter RAO gained 0.33% as the company managed to increase its electric power exports in January–March by 44.9% to 5.4 billion kilowatt-hours.

Hydropower giant RusHydro lost 4.83% as the company expects its power output in January–March to fall 4.9% to 15.4 billion kilowatt-hours.

Common and preferred shares of biggest bank Sberbank fell 5.23% and 8.06%, respectively, after the bank’s CEO German Gref said that the bank plans to allocate only 3.5% of its net profit on dividends for 2014, and dividend payments may stand at only 0.45 rubles per share after 3.2 rubles per share paid dividends for 2013.

Metals and mining company Mechel was among the underperforming companies and lost 2.57% after Sberbank CEO German Gref said that company’s suggestions on debt restructuring are not satisfying and the bank wants to gain control over the parent company or its key affiliates.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-5.23	72.50	11.754
Gazprom	-2.03	149.30	8.658
Lukoil	-0.16	2576.00	3.929
Norilsk Nickel	-0.21	9460.00	3.369
Surgutneftegas prefs	-3.42	41.00	2.157

(49.6749 rubles – U.S. $1)

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