Bloomberg News

Russia Stocks Headed for Seventh Days of Gains on Fed Stimulus

December 13, 2012

Russian stocks headed for a seventh day of gains after the U.S. Federal Reserve expanded its bond- buying program, boosting appetite for riskier assets.

The Micex Index (INDEXCF) rose 0.2 percent to 1,468.81 by 12 p.m. in Moscow, erasing an earlier decline of 0.4 percent. OAO Rostelecom, Russia’s state-run telephone operator, added 1.2 percent, while OAO Protek, a pharmaceuticals company, surged 11 percent.

Emerging-market stocks rose after the Fed said yesterday it will boost its asset purchases and central bank officials forecast it will maintain near zero interest rates until 2015. The Micex slid earlier as crude traded down 0.3 percent at $86.49 a barrel in New York. Republicans have “some serious differences” with President Barack Obama’s budget proposals, House Speaker John Boehner told reporters in Washington.

Initial optimism over the Fed’s plans “faded as the fiscal cliff reared its ugly head, pressuring risk sentiment,” VTB Capital analysts Maxim Korovin and Anton Nikitin wrote in an e- mailed report today.

Rostelecom climbed for a seventh day after Deputy Prime Minister Arkady Dvorkovich urged the company’s board and Telecommunications Ministry officials to improve their cooperation and work on a merger with Svyazinvest. The shares gained to 118.79 rubles.

Protek jumped the most since August after Interfax reported the company is seeking regulatory approval to buy back shares. The stock surged as much as 11 percent before trading up 6.6 percent at 29.20 rubles.

VimpelCom, Algeria

The Market Vectors Russia ETF (RSX:US), the largest dedicated Russian exchange-traded fund, rose 1 percent to $29.35 yesterday, the highest level since Oct. 18.

VimpelCom Ltd. (VIP:US), the world’s sixth-biggest mobile phone company by subscribers, slipped 1.7 percent yesterday to $11.06.

VimpelCom and the Algerian government have formed a new company to operate VimpelCom’s Orascom Telecom Holding SAE’s local unit, Vincenzo Nesci, chairman of Orascom-Telecom Algerie, also known as Djezzy, told reporters yesterday in Algiers. The new company, Optimum Telecom Algerie, is 51 percent owned by Algeria with the remaining portion held by VimpelCom, Nesci said.

The Micex trades at 5.5 times estimated earnings. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has added 14 percent.

Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net;

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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Companies Mentioned

  • RSX
    (Market Vectors Russia ETF)
    • $26.79 USD
    • 0.06
    • 0.22%
  • VIP
    (VimpelCom Ltd)
    • $8.67 USD
    • -0.01
    • -0.12%
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