Russian stocks fall further after weak Megafon debut

Wed Nov 28, 2012 9:22am GMT

Related Topics

* MICEX, RTS down in global worries
    * Megafon shares down on debut trading
    * Rouble weakens on oil

    By Maya Dyakina
    MOSCOW, Nov 28 (Reuters) - Shares in Russia's number two phone operator
MegaFon fell on their first day of trading on Wednesday after an initial public
offering was priced at the bottom of its guided range, adding to a sour mood on
Moscow stock markets.
    The poorly received launch added to concern over a fiscal deadlock in the
U.S. and a slide in oil prices that saw Moscow's rouble-denominated MICEX share
index and dollar RTS index fall 0.7 percent and more than one 
percent respectively.
    MegaFon  priced its offering at $20 per GDR, raising $1.7
billion. but saw the shares fall in the first minutes of trading
in London.      
    "People got full allocations and hedge funds made up a significant portion
of the book - that's a bad sign because they flip," said one equity salesman in
Moscow, referring to the strategy of short-term speculation.
    Shares in MTS - MegaFon's main rival - trimmed some of yesterday's losses,
rising by 0.6 percent.
    Still, Angelika Genkel, a senior analyst at Alfa Bank, said MegaFon
depositary receipts could get a considerable boost in demand from index-linked
institutional investors if the stocks are included in the MSCI Russia index
during the upcoming index revision scheduled for November 30.
    Chris Weafer, a strategist at Sberbank CIB said that investors have been
affected by uncertainly over Europe's debt, Chinese growth fears, and the
ongoing budget negotiations in the United States.
    Trading volumes on the Moscow stock exchange have remained subdued in recent
months, while investors became more selective, focusing on individual companies
with strong dividends.
    The rouble weakened on Wednesday, reacting to a decline in oil prices
, losing 0.3 percent against the dollar at 31.12, and
shedding 0.2 percent against the euro at 40.24. The rouble was
0.2 percent down at 35.22 against the euro-dollar basket. 
    
 Russian Markets                      Latest     Net  % Change  % Change
                                              Change             on year
 STOCKS                                                                 
 MICEX                               1387.39   -7.48     -0.54    -1.06 
 RTS                                 1406.22  -11.38     -0.80     1.76 
 London ADRs                          807.40   -2.93     -0.36     3.72 
 Emrg Mkt Indx                        991.61   -4.83     -0.48     8.21 
 MSCI Russia                          745.26   -4.47     -0.60     1.15 
 Sberbank                              88.08   -1.12     -1.26    11.69 
 VTB                                    0.05   -0.00     -0.68   -12.36 
 Gazprom                              137.30   -1.00     -0.72   -19.85 
 LUKOIL                              1911.70   -0.80     -0.04    12.29 
 Rostelecom                           116.06   -0.03     -0.03   -23.64 
 Dollar/Rouble                         31.12    0.09      0.28    -3.20 
 Euro/Rouble                           40.24    0.08      0.20    -3.60 
 Rouble basket                         35.22    0.09      0.24    -3.41 
 DEBT                                    Bid     Ask      %Rtn    Coupon
 Russia 10-yr bond                      7.06    7.03      0.00      7.60
 MONEY MARKET                            Bid     Ask     Close          
 Overnight rate                         6.56    7.07      6.38          
    TABLE FROM POWER PLUS PRO
    
All data taken from Reuters at 0816 GMT
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