Russia Stocks Rise to Seven-Month High on Commodities, China

Russian stocks climbed to the highest since October, led by metals and mining companies after China’s manufacturing expanded for the first time in nine months.

OAO Magnitogorsk Iron & Steel, Russia’s third-largest steelmaker, jumped 12 percent. OAO Gazprom Neft, the oil- producing arm of OAO Gazprom, climbed the most in a month as crude rose to a five-week high. AFK Sistema jumped the most in five months on speculation it will benefit from a merger of its OAO Comstar United Telesystems and OAO Mobile TeleSystems.

The Micex Index (INDEXCF) added 4.1 percent to 957.77 in Moscow after rallying 19 percent in April, the best month since August 2000. Local markets were closed May 1 for a public holiday. The RTS Index (RTSI$) added 2.7 percent to 855.67. Trading in Russian global depositary receipts in London is closed today because of a holiday.

The CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1, from 44.8 in March, indicating expansion. Copper and zinc futures climbed by the exchange- imposed 6 percent daily limit in Shanghai, and copper climbed to a two-week high in New York.

“Industrial demand in China is a boost to all commodities,” said Alexander Zakharov, co-head of equities at Moscow-based Metropol.

Magnitogorsk advanced 12 percent to 11.586 rubles, the biggest gain in three months. Nomura Holdings Inc. raised its price estimate 16 percent to 58 cents (19 rubles), citing “efficiency improvements and lower-than-expected raw material prices” after the company released its 2008 financial results last week.

OAO GMK Norilsk Nickel, the nation’s biggest mining company, rose 4.2 percent to 2,904.11 rubles, a third day of gains. Nomura raised its price estimate for Norilsk shares to $92 (3,034 rubles) from $42, citing higher forecasts for copper and nickel prices.

Chelyabinsk, Gazprom Neft

OAO Chelyabinsk Zinc, producer of more than half of Russia’a zinc, surged 30 percent to 64.31 rubles, the sharpest daily advance since October.

Gazprom Neft added 5.4 percent to 93.47 rubles, its biggest gain since March 25. OAO Lukoil, Russia’s second-largest oil producer, rose 4.7 percent to 1,548.32 rubles. Crude rose 1.9 percent to $53.78 a barrel in New York today, extending a 4.1 gain on May 1 when Russian stock markets were closed.

Sistema, the holding company of billionaire Vladimir Yevtushenkov, jumped 16 percent to 10.047 rubles, the biggest increase in five months. Sistema will decide on a potential sale of its stake in Comstar to Mobile TeleSystems by the end of the second quarter, Sistema Chief Executive Officer Leonid Melamed told reporters on April 29.

“If Sistema decides to sell its share of Comstar to Mobile TeleSystems, it may raise about $900 million, which would allow it to reduce net debt,” said Anna Lepetukhina, an analyst at Troika Dialog in Moscow. The Micex Telecom Index (MICEXTLC) added 4.2 percent, its steepest gain in more than a month.

Comstar rose 0.9 percent to 151.39 rubles in Moscow. MTS, Russia’s biggest mobile-telephone provider, added 5.9 percent to $36.55 at 11:42 a.m. in New York.

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

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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