March 21, 2013 / 3:46 PM / 4 years ago

UPDATE 1-Russia stocks slip after weak GDP data, Rosneft rises

6 Min Read

* 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
    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
    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
 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 
 Emrg Mkt                      1022.16   -4.19    -0.41     -3.13 
 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 
 Euro/Roubl                      39.90   -0.01    -0.02     -0.91 
 Rouble                          34.97    0.05     0.14      0.38 
 DEBT                              Bid     Ask     %Rtn     Coupon
 Russia                           6.92    6.91    -0.02       7.60
 10-yr bond                                              
 MONEY                             Bid     Ask    Close           
 Overnight                        5.40    5.75     5.65           
 All data taken from Reuters at 1440 GMT

 (Reporting by Sonia Elks and Jason Bush; Editing by Catherine Evans)

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