Russian RTS Index Snaps 14-Day Gain; Gazprom and Lukoil Retreat

Russian stocks fell, with the benchmark RTS Index (RTSI$) sliding from a record and posting its first loss in 15 sessions. OAO Gazprom (GAZP) and OAO Lukoil (LKOH) led the decline after crude oil dropped in New York.

The dollar-denominated RTS Index lost 0.7 percent to 1,838.61 at the close of trading in Moscow. The measure today touched an intraday record of 1860.14. It gained 10 percent in the previous 14 trading days, its longest winning streak ever. The ruble-based Micex Index (INDEXCF) slid 0.1 percent to 1611.67.

Gazprom, the world's biggest natural-gas company, fell 2.1 percent to $11.48. Lukoil, Russia's largest oil producer, decreased 1.3 percent to $89.50. Crude oil for January delivery lost as much as 1.3 percent to $61.25 a barrel on the New York Mercantile Exchange.

Oil fell amid skepticism that any OPEC decision at a meeting in Nigeria on Dec. 14 will reduce a surplus in global supply. The Organization of Petroleum Exporting Countries, the producer of about 40 percent of the world's oil, will consider a second reduction in three months. Stockpiles in the U.S., the world's largest consumer, have risen 5.3 percent in the past year.

Russia is the world's second-largest oil supplier and energy companies make up more than half of the RTS Index. The measure has surged 70 percent in the past 12 months, compared with a 28 percent gain for the Morgan Stanley Capital International's Emerging Markets Index, a global benchmark.

Higher Price Estimate

OAO Sberbank (SBER), the country's biggest lender, climbed 2.4 percent to a record $2,861, valuing the company at $57 billion. Merrill Lynch & Co. raised its price estimate on the shares by 36 percent to $3,400 after increasing the forecast for the bank's earnings this year and next.

Sberbank will benefit from surging mortgages in Russia and a planned sale of new shares, Merrill Lynch analyst Paul Tucker wrote in a report today. The lender aims to sell 198 billion rubles ($7.6 billion) of new shares early next year, Economy Minister German Gref said Dec. 6.

``The extra liquidity, and the proposed removal of some foreign ownership hurdles will be net positive,'' Tucker said. ``The country still has fewer than 200,000 mortgages -- and we think this will be the next great story.''

OAO Uralsvyazinform, Russia's fixed-line telephone monopoly in the Urals region, surged 8.5 percent to a record 5.35 cents, the biggest one-day gain in more than four months. OAO Central Telecommunication Company, which operates in central Russia, gained 3 percent to 68 cents. OAO VolgaTelecom, a provider of fixed-line services in the Volga region, advanced 1.8 percent to $4.55.

Acquisition

OAO Comstar United Telesystems approved the acquisition of a 25 percent plus one share stake in the operators' parent holding OAO Svyazinvest from billionaires Leonard Blavatnik and Viktor Vekselberg over the weekend, Reuters reported today, citing unidentified banking sources. The stake in the state holding is valued at $1.3 billion, according to the news agency.

Irina Potekhina, a spokeswoman at AFK Sistema holding, which controls Comstar, said ``there is no purchase.'' Comstar's head of investor relations Maria Yeliseyeva could neither confirm nor deny the deal. The company will have a board meeting tomorrow, she said.

Shares of Comstar increased 1.2 percent to $7 in London.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net

To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net

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