Bloomberg News

Russia Stocks Climb Most in Month Since October on Oil, Greece

January 31, 2012

Jan. 31 (Bloomberg) -- Russian stocks had their biggest monthly gain since October as oil prices boosted the outlook for the world’s biggest crude producer, and Greek progress in debt- swap talks lifted appetite for riskier emerging market equities.

The Micex Index of 30 stocks added 1.2 percent to 1,514.03 by the close in Moscow, bringing its monthly increase to 8 percent. OAO Mechel, Russia’s biggest producer of steelmaking coal, and hydropower producer OAO RusHydro both advanced more than 3 percent. The dollar-denominated RTS Index rose 2 percent to 1,577.29 for a monthly jump of 14 percent.

Oil, Russia’s main export revenue earner, rose as much as 2.5 percent to $101.29 a barrel in New York after December factory production climbed more than expected in Japan, the world’s third-biggest crude consumer. Greece’s prime minister said the country aims to complete debt-swap talks this week, bolstering gains in oil and European stocks.

“Market expectations have moved from euro-zone disintegration to a view that a solution will be found and we can avoid imminent collapse and pump more liquidity into the system,” Michael Kart, managing director at Spectrum Capital Partners in Moscow, said by phone. “This is seen as market positive.”

OAO Rosneft, Russia’s biggest oil company, rose 0.8 percent to 225.23 rubles.

Raspadskaya Declines

OAO Raspadskaya, a Russian coal producer, declined 0.6 percent to 106.33 rubles after closing the book on a stock buyback today.

OAO Severstal, Russia’s second-largest steelmaker, gained 3.1 percent to 440 rubles. The company reported today that fourth-quarter crude steel output dropped 6 percent from the previous three months to 3.76 million metric tons. Input costs for coking coal and iron ore also decreased.

OAO RusHydro, Russia’s biggest renewable energy producer, gained 4.5 percent to 1.1499 rubles, the highest level since Dec. 6. The state-controlled company boosted nine-month profit 19 percent to 30.6 billion rubles ($1 billion) after lowering costs.

“Markets are still similar to walking through a swamp – one step at a time and no sudden leaps of faith,” Chris Weafer, chief strategist at Troika Dialog in Moscow, said in a note. “It will likely remain a case of one cautious step at a time for some weeks to come.”

OAO Magnit, Russia’s biggest retail by number of stores, added 1.3 percent to 3,295.20 rubles. The retailer yesterday reported a 20 percent increase in net income to 12.2 billion rubles.

The ruble gained for the first day in three, strengthening 0.8 percent to 30.175 against the dollar, its strongest level versus the greenback since Oct. 31.

The Micex trades at 5.8 times analysts’ earnings estimates for member companies. That compares with 10 times for Brazil’s Bovespa index, 9.4 times for the Shanghai Composite Index and 15.1 for the BSE India Sensitive Index.

--Editors: Alex Nicholson, Peter Branton

To contact the reporter on this story: Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

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


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