RTS and MICEX Revival

As Russia Today website reports, Russia’s RTS and MICEX exchanges have opened higher on Monday, buoyed by a rebounding oil price, a positive mood in Asian and European trade, and ahead of moves by the Russian government to intervene in the markets by using the National Welfare Fund to buy shares in leading companies.

At 13.00 Moscow time the RTS is up 7.7% with the Micex up 5.4%.Energy majors Gazprom (up 6.2% on the Micex) Rosneft (up 5.8%) Lukoil (up 11%) and Surgutneftegaz (up 8.8%) are up with oil moving above $70 BBL mark ahead of this weeks OPEC meeting which is widely expected to agree to production cuts.

Also up on the Micex at 13.00 are MTS (up 6%) RusHydro (up7%) and Norilsk Nickel (up 7.4% on the Micex). The worlds largest nickel producer is up despite reports in Britain’s Financial Times that major shareholder, Oleg Deripaska, is in a race against time to refinance $2 Billion of a $4.5 Billion loan which could see his 25% stake in the resources giant handed to creditors.

The Russian Finance Minister Alexei Kudrin confirmed on Friday that starting from this week reserves in the National welfare fund will be used to by shares. Noting that the outlook for equities was going to continue to be volatile, and that international investors had largely deserted Russia, resulting in share prices of major Russian companies becoming undervalued, the Finance Minister stated,

"Starting next week, operations will be carried out to buy the shares of leading companies that are currently undervalued using 175 billion rubles from the National Welfare Fund,"

The moves in Russia follow a rebound in Asia, where the Nikkei closed up 3.5%, with the Hang Seng up 5.2%, and with early trade in Europe seeing the FTSE 100, Cac, and Dax up between 1.5 and 2.5%

Author: Ksenia Kochneva