Russia Stocks Rise to 3-Month High as Oil Tops $71, Metals Gain

Russian stocks rose for a second day, sending the Micex Index (INDEXCF) to the highest level in three months, as oil topped $71 a barrel and metal prices gained.

OAO Polyus Gold rallied 6 percent as bullion surpassed $1,000 an ounce, and OAO Sberbank, the nation’s biggest bank, climbed more than 5 percent as the ruble gained versus the dollar. The 30-stock Micex Index added 3.4 percent to 1,149.81, with all but two stocks rising.

Stocks advanced from Taipei to London as higher commodity and computer-memory prices boosted the earnings outlook for raw- material and technology companies. Goldman Sachs Group Inc. raised its forecasts today for metals because of “increasing evidence of a stronger-than-anticipated recovery in global industrial activity.”

“Global stock markets are rising, and the Russian market can’t exist without global markets,” said Nikolai Gusev, portfolio manager at Prospect Investment Co. in Moscow. “Oil is rising, the dollar weakened and commodity markets are rising. All of this is helping Russian stocks.”

The Micex has climbed 86 percent this year, the most among the 22 countries tracked by the MSCI developing-nation benchmark, as oil doubled from this year’s lowest level. Russia is surpassing Saudi Arabia in exports of crude and refined oil products for the first time since the Soviet Union’ collapse in 1991, according to Russian and International Energy Agency figures.

Oil Rallies

OAO Lukoil, the nation’s second biggest oil company, advanced for a second day, gaining 3.2 percent to 1,580.11 rubles. OAO Rosneft, the largest, climbed 3.8 percent to 210.35 rubles. Oil for October delivery increased 4.6 percent to $71.13 at the close of equity trading in Moscow, as the dollar weakened, spurring demand for commodities. OPEC ministers meets tomorrow in Vienna to decide crude output.

Polyus Gold, Russia’s largest producer of the metal, rose to 1,363.75 rubles, the highest level since June. OAO Polymetal, Russia’s biggest silver producer, advanced 2.5 percent to 269.64 rubles.

Gold rose to the highest price since March 2008, while silver climbed to a 13-month high as a weaker dollar and concern that inflation may accelerate boosted the appeal of precious metals. Bullion for December delivery surged to $1,009.40 on the Comex division of the New York Mercantile Exchange.

OAO GMK Norilsk Nickel, Russia’s largest mining company, gained 1.9 percent to 3,407.79 rubles, heading for the highest close in a week. Copper climbed for a fourth day, with three- month delivery copper on the London Metal Exchange adding 2.9 percent to $6,508 a metric ton.

Sberbank, Telecoms

OAO Sberbank rose 5.7 percent to 58.45 rubles, heading for the highest close in more than a year as the ruble strengthened for a fourth day against the dollar. A stronger ruble discourages Russians from converting local currency and withdrawing deposits, Sberbank’s main source of funding.

VTB, Russia’s second-biggest lender, increased 3.3 percent to 4.71 kopeks. The ruble strengthened 0.6 percent to 31.2815 against the dollar.

Regional fixed-line phone companies gained after Renaissance Capital recommended the stocks in the run-up to consolidation of the industry under OAO Rostelecom.

OAO VolgaTelecom, the dominant fixed-line phone network in Russia’s Volga River region, climbed 5 percent to 58.61 rubles. OAO Sibirtelecom, the dominant fixed-line operator in Siberia, advanced 4.7 percent to 98 kopeks.

“The regional telecommunication operators overall offer a better way into a combined entity as they are largely undervalued,” Ivan Kim and Alexander Kazbegi, analysts at Renaissance Capital investment bank in Moscow, wrote in a note to investors today.

VolgaTelecom trades at 5 times reported earnings, and Sibirtelecom is valued at 7.7 times profit, according to data compiled by Bloomberg. That compares with 9.7 times earnings for Rostelecom, the data show.

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

To contact the editor responsible for this story: Stephen Kirkland at skirkland@bloomberg.net

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