Bloomberg News

Russian Stocks Including Norilsk, Gazprom Rise; Sberbank Falls

February 02, 2007

Russian stocks including OAO GMK Norilsk (GMKN) Nickel and OAO Gazprom advanced, while OAO Sberbank paced declining shares.

Norilsk Nickel rallied on speculation the company would pay a large dividend to help one large shareholder buy out his partner.

The dollar-denominated RTS Index (RTSI$) added 0.1 percent to 1896.62, bringing this week's gain to 1.8 percent. The Micex Index was little changed at 1701.26, closing near yesterday's record. The ruble-denominated gauge also climbed 1.9 percent in the last five sessions.

Shares of Norilsk, the world's largest producer of nickel, rose 2 percent to $178.50, adding 9.9 percent in the last three days. Billionaire Mikhail Prokhorov will resign as chief executive officer and sell his shares to his billionaire partner, Vladimir Potanin, their holding company said Jan. 31.

``People are expecting a very large dividend,'' said Jochen Wermuth, managing partner of Wermuth Asset Mangement, which has about $800 million in Russian equities.

Potanin's financial resources are ``not large enough'' to buy out Prokhorov's estimated 27 percent stake in the company, Rob Edwards, an analyst at Renaissance Capital in Moscow, wrote in a research note. Edwards expects a dividend of $18 a share this year.

Gazprom (GAZP), the world's biggest natural-gas producer, closed up 0.2 percent at $10.90, after gaining as much as 0.8 percent earlier. On the New York Mercantile Exchange, crude oil for March delivery rose as much as 1.2 percent to $57.97 a barrel.

Evraz Group SA, Russia's largest steel producer, jumped 2.1 percent to $29.60 in London. UralSib bank raised its recommendation on the shares to ``buy'' from ``hold,'' citing the impact of the Evraz's acquisition of U.S.-based Oregon Steel and the positive outlook for the Russian construction industry.

`Wild Gyrations'

Sberbank, Russia's largest bank, slid 0.8 percent to 91,504 rubles on the Micex exchange. The shares plummeted as much as 7.2 percent after Reuters reported the bank may try to sell up to 3.5 million additional shares at Sberbank (SBER)'s three-month or six-month average price, which is at least 15 percent below the current market price.

Chief Executive Officer Andrei Kazmin later told the Ekho Moskvy radio station that this month's share sale would be priced in line with the stock's price in February.

Sberbank closed 5 percent higher yesterday after President Vladimir Putin touted them in a press conference.

``The wild gyrations of the stock betray the market's nervousness,'' Alex Kantarovich, head of research at MDM Bank in Moscow, wrote in a research note.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

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


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