Bloomberg News

Russia Stocks Climb Second Day on Central Bank Action, $100 Oil

December 01, 2011

Dec. 1 (Bloomberg) -- Russian stocks rose, lifting the benchmark index for a second day as crude climbed after central banks took steps to stem Europe’s debt crisis.

OAO Raspadskaya, a coking coal producer, and OAO Mosenergo, the Russian capital’s biggest power supplier, led gains on the 30-stock Micex gauge. OAO Surgutneftegas, an oil producer, added 1.5 percent. The index was 0.5 percent higher at 1,507.71 as of 10:31 a.m. in Moscow, while the dollar-denominated RTS added 0.2 percent to 1,543.32.

The U.S. Federal Reserve and five other central banks agreed to reduce the premium banks pay to borrow dollars overnight yesterday in a bid to stop the euro zone’s credit crisis from hobbling growth and demand for commodities. While Chinese manufacturing was the weakest since 2009, Russia’s output accelerated to an eight-month high, according to HSBC Holdings Plc indexes. Oil climbed 0.3 percent to $100.64 a barrel.

“Markets are still benefitting from yesterday’s move by the central banks, which helped avoid a serious banking crisis,” Peter Szopo, head of research at Moscow-based Alfa Bank said by e-mail today. With oil strengthening “the case for Russian stocks is strong,” he said.

The Russian depositary receipts of United Co. Rusal, the world’s biggest aluminum producer, slid 0.3 percent, as the Chinese output report spurred bets demand for the metal will ease.

Aluminum fell 1.3 percent to $2,082 a metric ton on the London Metal Exchange. The company plans to use an 18.3 billion ruble loan from OAO Sberbank to pay down debts, according to a regulatory statement today.

Lenders Climb

Sberbank, Russia’s biggest lender climbed 1.6 percent to 88.94 rubles. VTB Group, the country’s second largest, rose 0.7 percent.

The Micex has lost 10 percent this year as Europe’s debt crisis spread. The measure trades at 5.3 times analysts’ earnings estimates for member companies.

The Micex’s drop compares with a 18 percent slide for Brazil’s Bovespa index, which trades at 10 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 11 times estimated earnings, and the BSE India Sensitive Index has a ratio of 14.

“Investor expectations have turned a little bit positive, which is a real improvement,” Ilya Kravets, a research analyst at brokerage ED Capital in New York, said in a phone interview. “This news from the central banks was received very positively in the U.S., and if oil holds at these levels, Russian exporters are going to do really well because they don’t need much higher prices, they’re fine here.”

--Editors: Alex Nicholson, Stephen Kirkland

To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@bloomberg.net

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


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