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Bloomberg 19.08.2014 Yuri Selyandin's commentary "Russia Stocks Climb for 8th Day on Bets Ukraine Tension to Ease"

The Micex Index (INDEXCF) rose for an eighth day, the longest stretch of gains in 11 months, as energy companies and OAO Sberbank advanced after the Red Cross made progress toward allowing a Russian aid convoy into Ukraine.

The equity gauge climbed 0.8 percent to 1,435.98 at 12:32 p.m. in Moscow, taking its eight-day increase to 7.7 percent. Forty of the Micex’s 50 members increased, with OAO Lukoil, Russia’s second-biggest gas producer, adding 1.1 percent to a month high. OAO TMK jumped after OAO Rusnano said it will buy a stake in the the world’s largest pipe producer by output.

Speculation President Vladimir Putin will take steps to de-escalate the crisis in Ukraine has drawn investors into the Micex, which trades at less than half the average valuations of emerging-market peers. The Red Cross is close to working out details of a safe passage for about 280 Russian trucks headed for eastern Ukraine, according to Galina Balzamova, a spokeswoman for the International Committee of the Red Cross.

“Geopolitical tensions seem to have become less due to recent events,” Yuri Selyandin, a money manager who helps oversee about $2 billion at GHP Group in Moscow, said by e-mail. “This gives investors hope in the Russian market.”

The government in Kiev said it would accept the convoy if the Red Cross distributes the aid after customs and border officers examine it. The dollar-denominated RTS Index (RTSI$) climbed 0.6 percent to the highest level since July 25. Twenty-seven stocks on the Micex traded above their 50-day moving average yesterday, up from a four-month low of 10 on Aug. 7.

TMK rose 3.9 percent, leading index advancers, after OAO Rusnano, a a state-run nanotechnology venture capital company, said it will buy 6 percent of the company.

Lukoil increased to the highest level since July 14, while OAO Gazprom, Russia’s natural gas-export monopoly, climbed 0.9 percent, taking its five-day advance to 5.9 percent.

The rally in the Micex has trimmed its losses this quarter to 2.7 percent, a selloff triggered as the U.S. and European Union imposed tougher sanctions on the country. The measure trades at 5.1 times projected 12-month earnings, compared with a multiple of 11.3 for the MSCI Emerging Markets Index.