Bloomberg News

RTS Futures Rise on Oil’s Gain, Peaceful Rally: Russia Overnight

December 28, 2011

Dec. 28 (Bloomberg) -- Russian stock futures rose as crude climbed for a sixth day and a weekend protest in Moscow attended by at least 30,000 people was peaceful.

Futures on the dollar-denominated index expiring in March rose 0.1 percent yesterday in New York as the Bloomberg Russia- US 14 Index of Russian companies traded in the U.S. fell for the first time in five days, losing 0.5 percent to 91.18. OAO Surgutneftegas, a Russian oil producer, gained for a fifth day while Yandex NV, operator of Russia’s most popular Internet search engine, sank the most on the index, falling 2.4 percent.

Crude traded in New York capped its longest rally in more than a year and Brent oil topped $109 a barrel for the first time in two weeks as Iran threatened to block transportation through the Strait of Hormuz and confidence among U.S. consumers beat analysts’ forecasts in December. Organizers of the Dec. 24 protest rally over alleged election fraud said as many as 120,000 people attended the demonstration, the largest of Prime Minister Vladimir Putin’s 12 years in power.

“We’re going to see an evolution of the Russian political system, but we’re not going to see a revolution,” Ilya Kravets, a research analyst ED Capital in New York, which manages almost $100 million in assets, said in an interview. “People are putting way too much emphasis on these rallies. Stocks are cheap, and with Brent at $109, and the S&P doing what it did last week, Russia should be going much higher.”

The Standard & Poor’s 500 Index, the benchmark gauge of U.S. equities, rose less than 0.1 percent yesterday after adding 3.7 percent last week.

Gazprom, Sberbank

Kravets said he increased his position this month in OAO Gazprom, the world’s biggest natural gas exporter, OAO Sberbank, Russia’s largest lender, and OAO Magnit, Russia’s largest food retailer by market value.

United Co. Rusal, the world’s largest aluminum producer, dropped 1.2 percent to HK$4.84 in Hong Kong as of the city’s noon trading break. The MSCI Asia Pacific Index fell 0.6 percent today as data today showed Japan’s industrial production dropped and confidence among South Korean manufacturers sank to a 30- month low.

The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, dropped for a second day yesterday, losing 0.7 percent to $26.80. The RTS Volatility Index, which measures expected swings in the index futures, declined for a 10th consecutive day, falling 1.2 percent to 38.04 points, its lowest level since Aug. 5.

The RTS Index declined 1.1 percent in Moscow to 1,398.51 and the 30-stock benchmark Micex Index lost 0.3 percent to 1,386.12.

New York Shares

The Micex has lost 18 percent in 2011 and trades at 4.7 times analysts’ earnings estimates for member companies. That compares with a 16 percent slide for Brazil’s Bovespa index, which trades at 10.3 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 10.4 times estimated earnings, and the BSE India Sensitive Index has a ratio of 13.8.

Surgutneftegas in New York added 0.2 percent to $5.16 after shares in Moscow fell 0.2 percent to 16.254 rubles, the equivalent of 52 cents. One ADR equals 10 ordinary shares. Yandex declined 2.4 percent to $19.49.

Gazprom ADRs fell 0.6 percent to $10.84 after shares in Moscow dropped 0.6 percent to 170.47 rubles, or the equivalent of $5.43. One ADR represents two ordinary shares.

Sberbank fell 0.9 percent to $10.20 after shares declined 1.9 percent on the Micex to 79.97 rubles, or the equivalent of $2.55. One ADR represents four ordinary shares.

Oil Prices

Standard & Poor’s GSCI index of 24 raw materials rose 1.2 percent, its sixth straight increase, as crude for February delivery increased 1.7 percent to $101.34 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 16. The contracts added 0.1 percent in electronic trading today.

Brent oil for February settlement gained 1.2 percent to $109.27 a barrel on the London-based ICE Futures Europe exchange while Urals crude, Russia’s chief export blend, gained 0.8 percent to $110.06.

Gold fell to a one-week low on concern that Europe’s debt crisis may escalate and weigh on global growth. Gold futures for February delivery declined 0.7 percent to settle at $1,595.50 an ounce on the Comex in New York.

--Editors: Brendan Walsh, Marie-France Han

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

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


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