Russian Stocks Close at Record High on Crude Rebound, Valuations
August 15, 2016 — 11:00 AM EDT Updated on August 15, 2016 — 1:19 PM EDT
Russian equities closed at their highest level on record as rebounding oil prices lured investors to the cheapest stocks in emerging markets.
The benchmark gauge in the world’s biggest energy exporter rose 0.5 percent to 1,977.28 in Moscow, its third day of gains. Lukoil PJSC and Rosneft PJSC, the country’s largest oil producers, were among the biggest advancers on the 50-stock index as Brent crude climbed for a third day, set for the highest price since July 12.
Even after a rebound in crude prices this year, the Micex Index lags its peers and has the lowest price-to-estimated earnings ratio among countries included in the MSCI Emerging Markets Index. That appeals to investors seeking profits in riskier, higher-yielding assets as central banks keep rates near zero or below.
“Oil is heading for $50 and investors are piling into emerging markets, creating a boon for Russian stocks,” said Vadim Bit-Avragim, a money manager at Kapital Asset Management in Moscow, who said he plans to hold on to his Russian equity investments until at least October. “The Russian market may look expensive relative to history. But compared to other emerging markets, it’s still cheap and could rise higher.”
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http://www.bloomberg.com/news/articles/2016-08-15/russian-stocks-set-for-record-close-on-oil-rebound-valuations
