UPDATE 1-Russia stocks slip after weak GDP data, Rosneft rises
* Russian stocks give up gains after poor GDP data * Rosneft up 1.9 percent after completing TNK-BP acquisition * Russian exposure to Cyprus may be less than feared (Adds details, updates prices) MOSCOW, March 21 (Reuters) - Russian shares gave up early gains on Thursday following weak gross domestic product data and with the outcome of talks to resolve Cyprus's financial woes still uncertain. At 1440 GMT the rouble-based MICEX was up 0.1 percent at 1,460.6 points, while the dollar-based RTS index was down 0.2 percent at 1,486.8 points. Shares were weighed down by weak February GDP data which showed the Russian economy almost ground to a halt last month as a result of declining exports and slowing retail sales. Oil company Rosneft beat the trend, rising 1.9 percent, after completing its acquisition of rival TNK-BP more quickly than expected. The $55 billion deal is a victory for Rosneft chief Igor Sechin, a close confidant of Russian President Vladimir Putin, and creates a state-controlled oil major with annual hydrocarbon production of about 4.6 million barrels of oil equivalent. Ordinary shares in state-controlled telecoms company Rostelecom also beat the market, rising 3.5 percent after a report in the Vedomosti newspaper about terms for the company's share buy-back, which were more favourable than expected for ordinary shareholders. Russia and favoured tax haven Cyprus are continuing talks on a package to bail out the island in a crisis that puts Russian assets there at risk but may also offer opportunities for it to take control of strategic assets. Cypriot Finance Minister Michael Sarris said early on Thursday that he saw no major stumbling blocks remaining in talks to get Russia to extend a loan and invest in the euro zone state's banking and/or natural gas industries. "Germany and other European countries seem to be happy to see Russia contributing to any new rescue package for Cyprus," Sberbank analysts said in a note to clients. "In our view, Russia is trying to receive as much benefit as possible from this situation." Cypriot central bank chief Panicos Demetriades suggested in an interview with Vedomosti newspaper that Russian deposits in the island's teetering banks total 5 billion-10 billion euros - less than rating agency Moody's estimate that corporate deposits alone reached $19 billion by the end of 2012. The European Union has given Cyprus till Monday to raise the billions of euros it needs to clinch an international bailout or face the collapse of its financial system and likely exit from the euro currency zone. Stocks in Russia's number two bank VTB, which is thought to be particularly exposed to the Cypriot economy, were trading down 1.3 percent, while Sberbank was down 0.7 percent. Natalia Orlova, chief economist at Alfa Bank, suggested there may be real concern over whether Russian money in Cyprus could be retrieved, as evidenced by Prime Minister Dmitry Medvedev's threat on Wednesday to withdraw the double-taxation treaty with Cyprus. She added that the cabinet may also be looking to use the crisis to reduce Russia's capital outflows, which totalled $6 billion net in February and have reached $14-16 billion in the year to date. "While we believe that the Cyprus turmoil is unlikely to result in the return of Russian corporate capital, private individuals may well repatriate some of their savings to Russia as soon as they have access to their Cyprus deposits," she said. The rouble was 0.3 percent down against the dollar at 30.95, but was up by one kopeck against the euro at 39.90, leaving it down 0.1 percent at 34.97 against the euro-dollar basket. Russian Latest Net % % Change Markets Change Change on year STOCKS MICEX 1460.62 1.59 0.11 4.16 RTS 1486.81 -2.53 -0.17 7.59 London 859.04 -1.24 -0.14 -2.76 ADRs Emrg Mkt 1022.16 -4.19 -0.41 -3.13 Indx MSCI <.MIRU00000PUS 794.67 -0.96 -0.12 -1.59 Russia > Sberbank 101.69 -0.69 -0.67 9.41 VTB 0.05 -0.00 -1.30 -3.53 Gazprom 142.57 0.48 0.34 -0.79 LUKOIL 1945.60 -3.00 -0.15 -2.73 Rostelecom 121.51 4.15 3.54 0.92 Dollar/Rou 30.95 0.10 0.31 1.77 ble Euro/Roubl 39.90 -0.01 -0.02 -0.91 e Rouble 34.97 0.05 0.14 0.38 basket DEBT Bid Ask %Rtn Coupon Russia 6.92 6.91 -0.02 7.60 10-yr bond MONEY Bid Ask Close MARKET Overnight 5.40 5.75 5.65 rate All data taken from Reuters at 1440 GMT (Reporting by Sonia Elks and Jason Bush; Editing by Catherine Evans)
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