Bloomberg News

Russian Stocks Advance to Six-Month High on G-20 Summit, Crude

October 25, 2010

Russian stocks climbed to their highest in more than six months after Group of 20 finance chiefs agreed to avoid weakening currencies to lift exports and oil and metals gained.

OAO Magnitogorsk Iron & Steel, billionaire Viktor Rashnikov’s steelmaker, increased 2.9 percent. OAO Gazprom, the country’s gas export monopoly, added 0.9 percent, while oil producer OAO Gazprom Neft gained 1.1 percent, helping push the Micex Index 0.6 percent higher to 1,528.24 at the 6:45 p.m. close in Moscow. The 30-stock gauge pared gains after earlier advancing to its strongest since July 24, 2008.

Finance ministers of the G-20 leading economies pledged to refrain from “competitive devaluation” and let markets set foreign-exchange values and increase the influence of emerging markets within the International Monetary Fund. Oil, Russia’s main export earner, rose as much as $1.59 to $83.28 a barrel in New York. Tin, zinc, nickel, lead and copper all advanced on the London Metal Exchange. OAO GMK Norilsk Nickel, Russia’s largest miner, added 2.8 percent to 5,613.08 rubles, its biggest gain in 2 1/2 months.

“The G-20 move, which is derivative of dollar weakness spurring the appeal of commodity markets, is one of the things helping Russian stocks today,” Michael Kart, a managing partner at Moscow-based investment firm Marshall Spectrum Ltd., said by phone. “Rising oil and commodity prices are also supporting sentiment and risk-taking by investors.”

VTB Group, Russia’s second-largest lender, advanced to its strongest in more than 2 1/2 years after its price target was lifted at Citigroup Inc., which forecast rising profit and accelerating loan growth next year. The stock gained 2.4 percent to 10.38 kopeks, its highest since January 2008. The shares have surged 18 percent this month.

‘Sentiment Has Changed’

Russian stocks, the world’s best performers last year, increased 6 percent this month as crude oil prices climbed 3.6 percent amid signs the global economic recovery is gaining pace.

“Russia is suddenly at the forefront of the high-beta markets again,” Vladimir Savov, head of research at Moscow- based brokerage Otkritie Financial Corp., said by phone. “Sentiment has changed. Clients are calling us again asking about Russia and we are seeing significant fund flows over the past three weeks.”

The ruble gained for a third day versus the dollar, strengthening 0.4 percent to 30.2475 in Moscow. The currency was 0.2 percent weaker against the euro at 42.4025.

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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