Bloomberg News

Sberbank Surges as Futures Gain on Fed Move: Russia Overnight

December 01, 2011

Dec. 1 (Bloomberg) -- OAO Sberbank posted a record one-day gain in New York and Russian stock futures climbed as the lender reported better-than-estimated earnings and central banks took coordinated steps to ease global funding conditions.

Futures expiring in December on the dollar-denominated RTS index rose 0.8 percent to 155,720 by 2:50 p.m. in New York yesterday as the Bloomberg Russia-US 14 Index of Russian companies traded in the U.S. surged 5.4 percent to 100.57, the biggest one-day jump in more than a month. Sberbank climbed after reporting a 74 percent gain in third-quarter profit and raising its earnings forecast for 2011. OAO Gazprom, the world’s biggest natural gas exporter, rose as oil increased and Credit Suisse Group AG upgraded the stock.

The U.S. Federal Reserve and five other central banks including the European Central Bank agreed to reduce the premium banks pay to borrow dollars overnight yesterday in an effort to prevent the euro zone’s credit crisis from threatening global growth and demand for commodities. China also cut the amount banks have to keep in reserve to ease cash supply and insulate the world’s second-largest economy from a worldwide slowdown. Crude rose to its highest level in two weeks.

“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.”

Volatility Index

The RTS Volatility Index, which measures expected swings in the index futures, dropped for third day in four, falling 1.5 percent to 45.95 points, the lowest level in three weeks. The index is little changed for November.

Crude for January delivery rose 0.6 percent to settle at $100.36 a barrel on the New York Mercantile Exchange, the highest settlement price since Nov. 16. Urals crude, Russia’s chief export blend, was little changed at $110.91 after gaining every day this week. Oil and natural gas contribute about 17 percent of Russia’s gross domestic product.

Sberbank’s American depositary receipts jumped the most since first listing in New York on June 28 to $11.85, the highest price since Sept. 1. The ADRs rose 10 percent for November, the third-best performance on the Bloomberg Russia-US 14 index, which advanced 1.2 percent in the month.

Russia’s biggest lender said yesterday that profit in the three months to Sept. 31 surged 74 percent to 79.8 billion rubles ($2.6 billion), beating the average estimate of 75 billion rubles of nine analysts surveyed by Bloomberg. The Moscow-based company also raised its 2011 net income forecast for to as much as 310 billion rubles.

Better Position

Shares gained 6 percent on Moscow’s Micex index to 87.55 rubles, or the equivalent of $2.85, the highest level since Oct. 28. One ADR represents four ordinary shares.

Relative to banks in Europe, Sberbank is in a much better financial position, Leonid Slipchenko, a banking analyst at UralSib Financial Corp., said by phone from Moscow.

ADRs of OAO Mechel, Russia’s largest coal producer for steelmakers, advanced 13 percent, the most since May 10, to $10.89, as Fed-led moves boosted the outlook for metals and the European economy. Europe accounted for 19 percent of Mechel’s 2010 sales, while Asia represented 13 percent. The ADRs slid 17 percent in November.

Mechel shares in Moscow advanced 10 percent to 328.10 rubles, or the equivalent of $10.69.

Gazprom Upgraded

The Standard & Poor’s GSCI index of 24 raw materials rose 0.7 percent to 658.02, bringing its November gain to 1.6 percent, as copper futures for March delivery jumped 5.5 percent to close at $3.5755 a pound on the Comex in New York.

Gazprom rose to the highest level in two weeks in New York, climbing 5.3 percent to $11.50, as the company’s shares were raised to “neutral” from “underperform” at Credit Suisse on prospects that demand for natural gas in Europe, their largest market, will remain strong. The ADRs fell 1 percent for November.

Credit Suisse raised its target price for Gazprom shares listed in Moscow to $5.70. The company’s Micex stock added 2.8 percent to 175.39 rubles yesterday. One ADR equals two ordinary shares.

Polyus Gold International Ltd., the country’s biggest gold producer, was the only decliner on the Bloomberg Russia-US 14 index yesterday, losing 4.3 percent to $2.92 and extending its monthly decline to 11 percent. Polyus shares in Moscow fell 0.8 percent to 1,429.60 rubles, or the equivalent of $46.55.

The RTS index in Moscow gained 5.1 percent yesterday, the most since May 26, rising to 1,551.05 and cutting its decline in the month to 0.8 percent. The 30-stock Micex index gained 3.1 percent to 1,499.62, and was little changed in the month.

The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, added 6.4 percent to 31.21, gaining 2.5 percent in November, while the Bank of New York Mellon Russia ADR Index rose 6.2 percent to 849.66, its highest level since Sept. 1. The ADR index is up 14 percent this month.

--Editors: Emma O’Brien, Marie-France Han

To contact the reporters on this story: Leon Lazaroff in New York at Halia Pavliva in New York at

To contact the editor responsible for this story: David Papadopoulos at

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