CTC Media Inc. (CTCM:US) gained the most in five weeks in New York on speculation the Russian media company will report that first-quarter sales increased as its television channel boosted its share of local viewers.
CTC, which owns Russia’s fifth-biggest television channel by audience, climbed the most since March 23 in New York yesterday, leading gains on the Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. The gauge added 0.4 percent to 103.76. OAO Mobile Telesystems traded at the biggest premium over Moscow shares of Russian companies in the U.S. as local markets open after a two-day holiday.
Moscow-based CTC will report tomorrow that revenue rose 9 percent to $181 million, according to the median of seven analysts’ estimates compiled by Bloomberg. Mounting demand for TV advertising and Russian consumer confidence at a four-year high has helped the company capture a bigger share of the 18- and-older audience, according to Alfa Bank.
“The company is expected to report good results for the first quarter, because they won a bigger audience share and the overall advertising market in Russia is growing,” Iouli Matevossov, a senior analyst in Moscow at Alfa Bank, who recommends buying CTC’s U.S.-traded shares, said by phone from Moscow yesterday. Companies “are ready to spend or are already spending on advertising as consumer confidence is strong.”
CTC advanced 1.8 percent in U.S. trading to $11.03. The company is scheduled to report first-quarter earnings on May 3 before U.S. markets open. CTC pushed its valuation to 11.7 times estimated earnings (CTCM:US) in yesterday’s trading, almost twice the 6.63 average multiple for Russian companies listed in the U.S.
CTC’s average daily share of viewers 18 years and older for its television channel rose to 5.9 percent in the week to April 22, making it the fifth-most watched in Russia, according to TNS-Global. Average daily audience among viewers 4 years and over climbed to 6.8 percent from 6.3 percent in the week to April 15, the data showed.
CTC regained its fifth-place ranking among viewers 18 years and older in the week to April 22 after losing it to REN-TV in the previous week.
CTC also owns smaller television channels in Russia, including Domashniy and Peretz. Television advertising is the main source of the company’s revenue.
Russia’s advertising market, excluding political ads, grew 21 percent to $8.9 billion in 2011, data by the Association of Communication Agencies of Russia showed on Feb. 21.
The consumer confidence index in Russia advanced 2 points to minus 5 during the first quarter, the highest level since the third quarter of 2008, when the measure peaked at plus 1, the Federal Statistics Service in Moscow said in an e-mailed statement on April 6.
CTC shares also gained after Central European Media Enterprises Ltd. (CETV:US), a Bermuda-registered operator of television channels in central and eastern Europe rallied, Konstantin Chernyshev, the head of research at UralSib Financial Corp. said yesterday by phone from Moscow.
CME jumped 8.2 percent to $8.56 in New York yesterday, the highest level since Feb. 16, after Time Warner Inc. (TWC:US) said it will provide a $300 million loan to the company, raising its stake to 40 percent, the company said in an April 30 statement.
“It gives an overall positive sentiment” to the media segment of the market, Chernyshev said yesterday.
OAO Mobile Telesystems (MBT:US), Russia’s largest mobile operator, fell 0.6 percent to $19.45 yesterday, after gaining 2.5 percent on April 30.
The stock’s premium over the company’s Moscow listed shares rose to 23.1 percent on April 30, the highest since Feb. 6, as Moscow markets remained close for two days through May 1. The premium was at 22 percent yesterday, data compiled by Bloomberg show. One New York-listed ADR is equal to two ordinary shares traded on Russia’s Micex Index.
MTS’ board recommended paying 30.4 billion rubles ($1 billion) as dividends for last year’s earnings, according to an April 12 statement. To qualify for the payment, the shares must be bought by May 10, the company said.
“People buy ahead of dividend payments,” Chernyshev said by phone. “And those are pretty solid dividends by these days’ standards. MTS is known as a reliable dividends payer.”
OAO Mechel (MTL:US), Russia’s largest producer of coal for steelmakers, fell 0.7 percent to $8.63 in New York, the lowest close since April 23. The company will delay its 2011 financial results following talks with creditors, according to a filing with the U.S. Securities and Exchange Commission yesterday.
The stock’s discount to the company’s Moscow traded shares was 2.9 percent, the widest since April 19, data compiled by Bloomberg show. One New York-listed ADR is equal to one ordinary share traded on Russia’s Micex Index.
Oil climbed to a one-month high and commodities rose yesterday after April U.S. factory output in the U.S. rose at the fastest pace in 10 months, reports showed. Crude oil for June delivery gained 1.3 percent to $106.16 a barrel on the New York Mercantile Exchange.
Brent oil for June settlement gained 0.2 percent to $119.72 on the London-based ICE Futures Europe exchange. Urals crude, Russia’s main export blend, was little changed at $117.27.
United Co. Rusal, the world’s largest aluminum producer, gained 0.2 percent to HK$5.50 in Hong Kong trading as of 11:39 a.m. local time. The MSCI Asia Pacific Index rose 0.6 percent.
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