Bloomberg News

Russian Stocks Fall, Led by Gazprom, Norilsk; VimpelCom Gains

September 01, 2006

Russian stocks fell, led by OAO Gazprom, the world's largest natural-gas producer, and OAO Norilsk Nickel, the country's biggest mining company.

OAO Uralsvyazinform, the fixed-line telephone monopoly in the Urals region, and OAO VimpelCom, eastern Europe's second- largest mobile-phone company, advanced.

The dollar-denominated Russian Trading System Index fell 0.4 percent to 1620 as of the close in Moscow. The measure lost 1.4 percent this week, erasing some of last week's 3 percent gain. The ruble-priced Micex Index slipped 1 percent to 1434.01 today.

Gazprom shares declined 1.7 percent to $11.55. Morgan Stanley Capital International increased the gas monopoly's weighting in its emerging markets index to 5 percent from 2.6 percent as of today, making it the biggest stock in the gauge. The shares gained 13 percent in August as investors raised holdings before the increase.

``It's a correction after the recent bull run caused by the MSCI reweighting,'' said Alexei Bachurin, a trader at Renaissance Capital in Moscow.

Shares in OAO GMK Norilsk Nickel, the nation's biggest mining company, slipped 1.9 percent to 3,543.65 rubles ($132.46) on the Micex Stock Exchange. Copper fell after strikers at the world's biggest copper mine returned to work, easing supply constraints of the metal.

Copper for three-month settlement declined 1.6 percent to $7,575 a metric ton on the London Metal Exchange, ending two days of gains.

`Most Oversold'

Shares of Uralsvyazinform advanced 2.4 percent to 3.84 cents.

``The shares are among the most oversold, they have a big potential for gain,'' said Dmitry Alexandrov, a trader at Russ- Invest in Moscow. ``The company had reported strong earnings, international investors are showing more interest in the stock.''

Uralsvyazinform, one of the seven regional operators in Russia, in June said 2005 sales jumped 20 percent to $1.12 billion as more people signed up for its mobile-phone and Internet services. The company's shares have lost 2.1 percent this year, lagging behind a 44 percent surge for the RTS Index.

VimpelCom shares rose 4.9 percent to $56.99 in New York. Second-quarter profit rose 23 percent to a record $194.9 million as the company added more customers in Russia and Kazakhstan. Sales advanced 46 percent to a record $1.12 billion.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net.

To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net.


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