Yandex Rises to Highest Level in Three Months Following Twitter Agreement
Yandex jumped 6.8 percent in New York yesterday, the biggest gainer on the Bloomberg Russia-US 14 index of Russian companies traded in the U.S., which fell 0.2 percent to 108.92. Volumes for the Internet stock were the most since Jan. 26. Futures expiring in March on the dollar-denominated RTS Index added 0.2 percent to 165,340 in U.S. trading.
The Internet company, which has its chief share listing on the Nasdaq Composite Index, will make the full “tweet” feed available on the site as it focuses on boosting social- networking search capabilities, Yandex and Twitter said yesterday. Yandex will probably report fourth-quarter adjusted net income of 2.1 billion rubles ($71 million) today, from 1.7 billion rubles in the third quarter, according to the median of three analyst estimates compiled by Bloomberg.
“Partnership with a social media leader like Twitter is certainly positive for Yandex as it may provide a social media offering that it currently lacks,” Ilya Kravets, a research analyst at ED Capital in New York, which manages almost $100 million in assets, said by phone yesterday. “If Twitter is integrated into the Yandex platform, it may create a unique product.”
Russian stock futures and energy producers including OAO Gazprom (OGZPY) and OAO Surgutneftegas (SGTPY) gained yesterday as oil, which along with sales of natural gas provided almost 50 percent of Russian government revenue last year, rose to a nine-month high.
Crude for March delivery added 2.5 percent to $105.84 a barrel on the New York Mercantile Exchange, the highest settlement since May 4. Commodities advanced as euro-area finance ministers agreed on a second bailout for Greece and Iran said it stopped selling oil to France and Britain.
Brent oil for April settlement increased 1.3 percent to $121.66 a barrel on the London-based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, gained 0.5 percent to $121.14.
American depositary receipts of Gazprom, the world’s biggest natural gas producer, rose 0.2 percent to $12.68 in New York. U.S. markets were closed for a holiday on Feb. 20. Gazprom’s shares on Moscow’s Micex (INDEXCF) Index tumbled 1.2 percent yesterday to 188.67 rubles, or the equivalent of $6.34. One ADR equals two ordinary shares.
Surgutneftegas ADRs rose 0.8 percent to $6.45, while its shares in Moscow fell 0.9 percent to 19.09 rubles, or 64 U.S. cents. One ADR equals ten ordinary shares.
“It’s a day of market euphoria because of the agreement on Greece, it doesn’t resolve the situation, it gives them a little more time, helping this strong rally in risk assets,” Ian McCall, a managing partner at Quesnell Capital SA, an emerging markets investment adviser in Geneva that manages 100 million Swiss francs ($108 million) including Russian assets, said by phone yesterday. “Oil is high. That is also good news for Russian assets.”
Yandex surged the most since Nov. 3 to close at $23.57 in New York yesterday, the highest level since Nov. 15, bringing its advance for the year to 20 percent. The stock slid 49 percent from a May initial public offering last year, outpacing the 28 percent 2011 decline in global depositary receipts traded in London of competitor Mail.ru Group (MAIL), the largest Russian- language Internet company.
Trading volumes for Yandex totaled more than $4.9 million yesterday, data compiled by Bloomberg show. That’s more than twice the stock’s daily average and the most of any U.S.-traded Russian stock yesterday, according to Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp.
Call options to buy stock of Yandex were 3.8 times the four-week average yesterday and twice the average volume of puts to sell, data compiled by Bloomberg show. March $25 calls, with a strike 6.1 percent above yesterday’s close, were the most active options, changing hands 1,081 times, the data show.
Russia’s advertising market, excluding political ads, grew 21 percent to 263.4 billion rubles ($8.9 billion) in 2011 from 2010, exceeding the amount spent by advertisers in 2008 for the first time since the global financial crisis, the Association of Communication Agencies of Russia said in a report released yesterday.
Internet ad spending grew the most, expanding 56 percent, the data showed. Advertising is the main source of revenue for Yandex.
The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, slid 0.5 percent to $31.71, snapping a three-day jump. The RTS Volatility Index (RTSVX), which measures expected swings in the index futures, declined 0.6 percent to 31.51. The RTS in Moscow was little changed at 1,655.36 yesterday, while the 30-stock Micex fell 1.3 percent to 1,558.98.
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