Bloomberg News

Russian Stocks Extend Longest Rally in 4 Years; Ruble Gains

March 05, 2010

Russian stocks gained for a seventh day, posting the longest winning streak in almost four years, as oil rose, brokerages upgraded estimates for coking-coal producers and a stronger ruble buoyed banks.

OAO Gazprom, the world’s largest natural-gas company, rose 2.8 percent. OAO Raspadskaya, Russia’s biggest coking-coal producer, climbed 5 percent after Morgan Stanley raised its price estimate on the outlook for higher coal prices and export contracts. OAO Sberbank, the biggest bank, jumped 5 percent. The 30-stock Micex Index added 2.2 percent to 1,414.37 at close in Moscow, posting its longest stretch of gains since July 2006.

“The big global funds are now looking at Russia,” Clemens Grafe, chief economist at UBS AG in Moscow, said in a phone interview. Investors “now they feel risk is off the table because oil is definitely gaining.”

Oil, Russia’s main export, rose above $81 a barrel in New York after data showed the U.S. lost fewer jobs than forecast in February, bolstering the outlook for crude demand in the world’s largest energy consumer. Oil increased as much as 1.7 percent to $81.54 a barrel in New York, extending gains from this year’s low on Feb. 5 to 14 percent.

Russian stocks, three times more expensive than at their lows in October 2008, are still attractive bets because of the nation’s “symbiotic relationship” with China, the world’s second-largest energy consuming country, HSBC Global Asset Management said. Aviva Plc, the U.K.’s second-biggest insurer, is seeking to buy Russian competitors at less than a quarter of their price before the global credit crisis.

Coal Producers Rally

Coal producers Raspadskaya and OAO Belon gained after Morgan Stanley raised its price estimate for both stocks. Belon added 5.2 percent to 25.81 rubles, posting its strongest closing level since Oct. 3, 2008.

OGK-3 advanced to its highest intraday level in a month, rising 2.3 percent to 1.457 rubles, after VTB Capital upgraded the electricity generator “hold” from “sell.”

The ruble strengthened to 34.6155, a 14-month high, against the central bank’s target euro-dollar basket. The Russian currency gained 0.6 percent to 40.4529 per euro, while slipping 0.3 percent to 29.8394 against the dollar.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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