Bloomberg News

Russia RTS Futures Advance as Oil Gains, Unemployment Falls

June 22, 2011

June 22 (Bloomberg) -- Russia’s RTS index futures rose, signaling shares may advance for a second day in Moscow, as oil gained and reports showed unemployment fell more than forecast while fixed-capital investment surged in May.

Futures on the dollar-denominated index expiring in September rose 0.3 percent yesterday. The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, rose 1.4 percent. Lukoil’s American depositary receipts gained 0.8 percent. Gazprom’s ADRs rose 1.6 percent.

“Russia stands to benefit from almost any kind of chaos on the international markets, as people want to invest in real things, such as oil,” Elena Matrosova, a Moscow-based economist at BDO International, a financial adviser that lists the central bank among its clients, said in a telephone interview. “Any oil price volatility has an immediate impact on Russian equities prices.”

Oil, Russia’s top export, climbed in advance of an Energy Department report on U.S. supplies today that is expected show inventories fell for a third week.

Inventories dropped 1.83 million barrels, or 0.5 percent, to 363.7 million in the seven days ended June 17, according to the median of 16 analyst estimates before today’s Energy Department report. Thirteen of the respondents forecast a decline, two projected a gain and one said there would be no change.

Oil for July delivery expired at $93.40 a barrel on the New York Mercantile Exchange. Futures have advanced 20 percent in the past year. The more actively traded August contract gained 54 cents, or 0.6 percent, to settle at $94.17 a barrel.

Russian Economy

Russia’s jobless rate dropped to 6.4 percent in May, the lowest since September 2008, from 7.2 percent in April, the Federal Statistics Service in Moscow said in an e-mailed report yesterday. The median estimate of 12 economists in a Bloomberg survey was 7 percent. Fixed-capital investment surged 7.4 percent from a year earlier, the most in 2011, beating the 4 percent forecast. Retail sales rose 5.5 percent from a year earlier last month, exceeding economists’ estimate of 5.4 percent.

“Rosstat has released economic data for May that reveal an unexpected surge in investment, robust growth in consumption accompanied by a declining savings rate and labor market tightening,” Aleksandra Evtifyeva, a Moscow-based analyst at VTB Capital, said in an e-mailed report. “It remains to be seen how sustainable the recent surge in investment is.”

Russia’s Micex Index rose for the first day in seven yesterday, snapping the longest losing streak since October 2008. The 30-stock gauge advanced 0.6 percent to 1,635.38 at the 6:45 p.m. close in Moscow, its first increase since June 9. The dollar-denominated RTS Index increased 0.8 percent to 1,872.45.

Russia, the world’s largest energy exporter, also produces metals including steel, copper, nickel, palladium and aluminum. Oil and natural gas make up a quarter of its economic output.

The Thomson Reuters/Jefferies CRB Index of 19 raw materials rose 0.6 percent yesterday.

--With assistance from Jason Corcoran in Moscow. Editors: Marie- France Han, Richard Richtmyer

To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net

To contact the editors responsible for this story: Gavin Serkin at gserkin@bloomberg.net; David Papadopoulos at papadopoulos@bloomberg.net


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