Dec. 23 (Bloomberg) -- Russian stocks including OAO Gazprom, the country’s biggest publicly traded company, may rebound next year following a “triple whammy” of negative factors in 2008, UBS AG said.

A slowdown in global economic growth that hurt commodity prices, the global financial crisis that boosted borrowing costs and Russia-specific ailments including “deteriorating” corporate governance and forced selling to meet margin calls pushed the 50-stock RTS Index down 71 percent, UBS said.

Next year, materials and commodities exporters such as OAO Gazprom, the world’s biggest natural-gas producer, and OAO Novolipetsk Steel, the steelmaker controlled by billionaire Vladimir Lisin, may benefit from a rebound in commodities prices and a weaker ruble, the Swiss bank said.

“Apart from global catalysts, we think the most likely near-term trigger for the market will be a re-pricing of the currency to a level that allows the central bank to stabilize its reserves,” UBS analysts led by Dmitry Vinogradov wrote in a strategy report dated today.

Russia’s foreign reserves, the third biggest in the world, have fallen by 27 percent since early August as the central bank bought rubles in exchange for dollars to slow the national currency’s decline. Russia’s Urals blend of crude sank to the lowest in almost four years today, falling 1.4 percent to $36.53 a barrel.

The ruble fell against the euro and strengthened against the dollar, a day after Russia devalued the currency for the ninth time since Nov. 11 as oil prices tumbled. The ruble weakened as much as 0.3 percent to 39.7563 versus the euro and was at 39.6703 at 2:59 p.m. in Moscow. The ruble advanced 0.4 percent to 28.3625 per dollar.

Large Shareholders

Corporate governance concerns have shifted from encroachment by the state, which controls large companies including Gazprom and oil producer OAO Gazprom, to the behavior of large shareholders at companies including OAO GMK Norilsk Nickel and Sibir Energy Plc, UBS said.

“Previously, we were mostly concerned with the government’s involvement, while the risk at privately owned companies seemed low,” Vinogradov wrote. “Private controlling shareholders increasingly emerge as a source of risk.”

Besides corporate governance risk, UBS said the high corporate bond yields in Russia are deterring investors from putting money into equities and preventing companies from investing in new projects.

“When yields on corporate debt stay at levels of 20 to 25 percent or above, it makes little economic sense for corporates to invest, as very few projects will generate an internal rate of return above this threshold,” Vinogradov wrote. “The bond- market pricing appears irrational and more reflective of global risk aversion than real default threats in Russia.”

Besides Gazprom and Novolipetsk, UBS also recommended shares of OAO Uralkali, Russia’s second-biggest potash producer, and OAO Mobile TeleSystems, its biggest mobile-telephone company.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

Last Updated: December 23, 2008 07:03 EST