Bloomberg News

Gazprom Jumps as U.S. Jobs Buoy Global Outlook: Russia Overnight

December 16, 2011

Dec. 16 (Bloomberg) -- OAO Gazprom and OAO Sberbank climbed the most in two weeks in New York as better-than-forecast economic data in the U.S. and Germany bolstered the outlook for global growth.

The Bloomberg Russia-US 14 Index of Russian companies traded in the U.S. jumped 2.9 percent, the most since Nov. 30, rising to 90.36. Gazprom, the world’s biggest natural gas exporter, led gainers, while VimpelCom Ltd. fell for the eighth day as the mobile-phone operator hired a television-network chief to head its Russian unit.

U.S. jobless claims fell to the lowest level since 2008, signaling the world’s largest economy may be starting to strengthen. The number of applications for unemployment payments dropped less than the lowest forecast of economists surveyed by Bloomberg and the least since May 2008. Manufacturing in Germany, the largest economy in Europe, shrank less than expected this month. Europe is Russia’s biggest trading partner.

“The better numbers from the U.S. help Europe, and Europe has been holding back Russia for some time,” Mattias Westman, managing director of Prosperity Capital Management, which says it is the largest Russia-focused equity investor with about $5 billion under management, said in a phone interview from Moscow. “While Europe may be behind America in the recovery cycle, fears have been so extreme for six months or so that any let-up on that should improve these markets significantly.”

Futures on Russia’s dollar-denominated RTS index expiring in March were little changed yesterday at 137,150, after the measure in Moscow advanced 1.9 percent to 1,395.28.

Volatility Drops

The RTS Volatility Index, which measures expected swings in the index futures, dropped for a second day, falling 2.4 percent to 48.86 points. The 30-stock Micex index in Moscow, which has lost 17 percent this year, gained 1.5 percent to 1,393.61. The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, advanced for the first time in six days, adding 3.4 percent to $26.94.

VimpelCom slid to the lowest level in more than two months in New York trading as the company appointed Anton Kudryashov, the former chief executive officer of CTC Media Inc., the U.S.- listed Russian television network, to head its Russian subsidiary. VimpelCom dropped 1.2 percent to $9.49 while CTC Media gained 0.3 percent to $8.89.

Kudryashov “is now leaving CTC Media with a string of problems, after cutting spending on their in-house production and losing audience share. On top of that, he has no experience in telecoms,” Anna Lepetukhina, an analyst at Troika Dialog, Russia’s oldest investment bank, said by phone from Moscow.

‘Good Manager’

Kudryashov headed CTC Media since August 2008 after working as a banker at Credit Suisse First Boston International and Moscow brokerage Renaissance Capital, where he was a founding partner.

Westman, who owns shares of VimpelCom but not CTC Media, said Kudryashov “is a good manager and he’s moving up to a bigger company. We’ll hope CTC can replace him but it is a little bit of a loss for them and a boost for VimpelCom.”

OAO Mechel, Russia’s largest producer of steelmaking coal, led decliners on the Bloomberg Russia-US 14 index, falling 3.6 percent to close at $8.68 after the company’s third-quarter profit fell 87 percent from the previous three months on lower sales.

Net income dropped to $25.7 million in the period, from $191.9 million in the second quarter, Mechel said in a regulatory filing yesterday. The results missed the $268 million average estimate of eight analysts surveyed by Bloomberg. Sales declined 7.6 percent to $3.21 billion.

Gazprom, Sberbank

Gazprom, Russia’s gas export monopoly, climbed 5.3 percent, the most since Nov. 30, to $10.73 after shares in Moscow gained 3.5 percent to 171.25 rubles, or the equivalent of $5.38. One Gazprom American depositary receipt represents two ordinary shares.

ADRs of OAO Sberbank, Russia’s largest lender, rose 2.5 percent to $10.32 after shares gained 1.1 percent on the Micex to 82.29 rubles, equal to $2.59. One ADR represents four ordinary shares.

Shares of United Co. Rusal, the world’s largest aluminum producer, tumbled 3.5 percent to HK$4.72 at 10:36 a.m. in Hong Kong.

Crude oil rose 0.1 percent in after-hours trading after tumbling 1.1 percent to $93.87 a barrel, the lowest level in six weeks, on the New York Mercantile Exchange yesterday. Brent oil for January settlement was little changed at $105.09 on the London-based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, lost 0.5 percent to $103.54.

Oil and natural gas sales make up almost 50 percent of Russian government revenue this year, equal to about 10 percent of gross domestic product, the Finance Ministry said on its website on Dec. 14.

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

To contact the reporters on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net Halia Pavliva in New York at hpavliva@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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