Russian stocks advanced for the 15th day in 16. OAO Sibirtelecom and OAO Uralsvyazinform led fixed- line regional operators higher after OAO Comstar United Telesystems bought a quarter of their parent OAO Svyazinvest.
The dollar-denominated RTS Index (RTSI$) added 0.4 percent to 1,846.67 at 12:47 p.m. in Moscow. The ruble-based Micex Index gained 0.5 percent to 1619.18.
Uralsvyazinform, which operates in the Urals region, increased 2.6 percent to a record 5.49 cents. Sibirtelecom, which provides services in Siberia, advanced 1.4 percent to 2.612 rubles (10 cents) on the Micex Stock Exchange. OAO VolgaTelecom, a provider of services in the Volga region, surged 4.8 percent to 124.47 rubles.
Comstar, controlled by Russian billionaire Vladimir Yevtushenkov's AFK Sistema (SSA) holding, bought 25 percent of Svyazinvest, the national fixed-line phone operator, for $1.3 billion in cash from billionaires Leonard Blavatnik and Viktor Vekselberg.
The stake's size is enough to let Comstar block major company decisions, under Russian law. The government has been planning to sell the state's 75 percent stake in Svyazinvest for the last decade.
``The sale could signal progress in behind-the-scenes negotiations of the Svyazinvest privatization,'' Moscow-based Alfa Bank wrote today in a market report. ``We like fixed-line names with exposure to the mobile market, particularly Volga and Siberia Telecom.''
Comstar shares soared 7.9 percent to $7.55 in London. Shares of Sistema advanced 3.2 percent to $30.12.
Merrill Lynch & Co. yesterday raised its price estimate on the shares by 36 percent to $3,400 and maintained a ``buy'' recommendation after increasing the forecast for the bank's earnings this year and next.
OAO Rosbank (ROSB), in which Societe Generale SA owns a stake, climbed 5.8 percent to 156.65 rubles on the Micex. Moscow-based MDM Bank yesterday raised its price estimate for the shares by 15 percent to $8.38 and maintained a ``buy'' recommendation on the stock. CentreInvest Securities in Moscow increased its rating on the shares to ``buy'' from ``hold.''
To contact the reporter on this story: Maria Ermakova in Moscow at firstname.lastname@example.org