Bloomberg News

Norilsk ADRs Gain Most in Three Weeks as Commodity Prices Rise

February 13, 2012

Feb. 13 (Bloomberg) -- OAO GMK Norilsk Nickel gained the most in three weeks in New York as the world’s largest producer of nickel and palladium said metal prices will rise this quarter and Greece’s approval of an austerity plan boosted the outlook for Europe, the company’s largest customer.

Norilsk’s American depositary receipts climbed 4.8 percent to $19.54 at 12:42 p.m. in New York, the biggest intraday gain since Jan. 25. Shares in Moscow rose 3.5 percent on the Micex to 5,825 rubles, or $194.71. One ADR represents one-tenth of an ordinary share. Norilsk ADRs have advanced 27 percent this year after losing 36 percent in 2011.

Moscow-based Norilsk sees metals prices rising this quarter as investment demand rebounds, according to Anton Berlin, head of marketing. Norilsk plans to increase nickel production at mines in Africa and Australia this year, Berlin said in an interview in Moscow. Commodities rose after Greek lawmakers approved a budget-cutting plan, bolstering chances for a solution to Europe’s debt crisis.

“Commodity prices have been rebounding since the beginning of the year, and that’s been very helpful for Norilsk,” said Alexander Pukhaev, an analyst at VTB Capital in Moscow, in a phone interview. “The better news flow out of Europe today is also very positive as sentiment improves about global growth.” Pukhaev has a “hold” rating on Norilsk.

Standard & Poor’s GSCI index of 24 raw materials rose 0.6 percent to 677.57. Nickel, which fell 0.7 percent to $20,565 a ton on the London Metal Exchange, has gained 9.9 percent this year. European sales comprised more than half of Norilsk’s 2010 revenue.

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

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

To contact the editor responsible for this story: Emma O’Brien at Eobrien6@bloomberg.net


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