Sberbank Shares Jump as ADRs Climb From Seven-Month Low
OAO Sberbank (SBRCY) and OAO Lukoil (LUKOY)’s American depositary receipts led a rebound in Russian shares traded in New York on prospects the companies, two of the nation’s largest, are planning to expand their investor base.
State-run Sberbank, Russia’s biggest lender, rose 4.5 percent after a person with knowledge of the matter said the government plans to sell a 7.6 percent stake. Lukoil, its largest non-state oil producer, advanced the most in three months as the company said it plans to list $1 billion of existing shares in Hong Kong within a year. The Bloomberg Russia-US Equity Index (RUS14BN) surged from the lowest level since Oct. 5, while futures on Russia’s dollar-denominated RTS Index (RTSI$) fell 0.2 percent.
U.S.-traded shares advanced after the ruble-denominated Micex (INDEXCF) Index posted its biggest gain since Feb. 24 in Moscow as a person with knowledge of the matter said Prime Minister Dmitry Medvedev is speeding up the government’s state asset sale program. The government owns 57.6 percent of Moscow-based Sberbank through the central bank, or Bank Rossii, and has postponed selling part of that stake several times since the original September 2011 target date, citing market turmoil.
“These moves signal an increased willingness on the part of Russia’s government shareholders to heighten corporate transparency and broaden shareholder bases,” Alec Young, a global equity strategist at S&P Capital IQ in New York, said by phone yesterday. “Those are two trends that Western investors would like to see more of.”
The Market Vectors Russia ETF (RSX), a U.S.-traded fund that holds Russian shares, advanced for the first time in five days, with a 3.3 percent jump to $24.90. The RTS Volatility Index, which measures expected swings in the index futures, rose 1.9 percent to 42.55 points.
Relief on Greece
The Standard & Poor’s 500 (SPX) Index advanced to a two-week high after data signaled stabilization in the U.S. housing market and as Greek opinion polls eased concern the country will leave the euro. The index added 1.1 percent to 1,332.42 while the Dow Jones Industrial Average (INDU) gained 1 percent to 12,580.69.
“The latest poll data out of Greece is giving investors reassurance that the Greek people will vote for their self- interest and remain in the euro, which is boosting shares globally,” Young said.
United Co. Rusal (486), the world’s largest aluminum producer, dropped 2.3 percent to HK$4.62 in Hong Kong trading as of 10:22a.m. local time. The MSCI Asia Pacific Index fell 1.3 percent today as China damped speculation that it will introduce large-scale stimulus to bolster its economy.
Sberbank ADRs climbed to $10.47 after shares in Moscow gained 4.7 percent to 84.11 rubles, or the equivalent of $2.60. One ADR equals four shares.
American depositary receipts of Moscow-based Lukoil surged 4.5 percent to $53.50, a two-week high, after shares on the Micex Index rose 3.6 percent to 1,728.60 rubles, or $53.41.
Lukoil may buy back an additional $2 billion to $3 billion of its own shares to support the stock, Deputy Chief Executive Officer Leonid Fedun told reporters yesterday in Hong Kong after a presentation to investors. The company may use part of the shares for the listing and some for a management bonus program, and may cancel some, he said.
Lukoil’s advance yesterday follows a 17 percent decline this month through May 25 that paralleled the drop in crude, said Ilya Kravets, a research analyst ED Capital in New York, which manages almost $100 million in assets, said by phone.
“When crude goes down significantly, anything that has the word oil in it gets hammered,” said Kravets, whose firm owns shares in Lukoil.
Crude traded on the New York Mercantile Exchange fell 0.1 percent yesterday to $90.76 a barrel to extend its decline since this month to 13 percent. Brent oil for July settlement dropped 0.4 percent to $106.68 a barrel on the London-based ICE Futures Europe exchange while Urals crude, Russia’s chief export blend, lost 1 percent to $104.24.
VimpelCom Ltd. (VIP), a mobile operator with more than 200 million subscribers worldwide, climbed the most on record after posting on May 25 its largest decline since its public offering in April 2010. Amsterdam-based VimpelCom, the world’s sixth- largest wireless operator, advanced 11 percent in New York to $8.11.
Investors “overreacted” to a May 25 ruling by a Moscow court that said VimpelCom was banned from paying dividends for its 2011 earnings, said Tibor Bokor, an analyst at ING Bank NV in London.
“We had no trading on Monday so people calmed down and realized that the dividend will eventually be paid, and that there are ways to get the issue resolved as more cash is being generated,” Bokor, who has a buy rating on the shares, said in a phone interview.
OAO Mobile TeleSystems (MBT), Russia’s largest mobile-phone operator, jumped the most in six months after Troika Dialog said in an e-mailed note to investors that MSCI Inc. (MSCI) will boost the stock’s weighting in its Russia 10/40 index.
MTS, as the company is known, surged 6.2 percent, the most since Nov. 22, to $17.59 after shares in Moscow gained 2.5 percent to 234.50 rubles, or $7.27.
The Bloomberg Russia-US Index climbed 3.7 percent to 84.90. The RTS Index in Moscow rose 1.7 percent to 1,299.20 while the 30-stock Micex Index gained the most since February, surging 2.8 percent to 1,327.08. RTS Index futures expiring in June fell to 130,115.
The Micex has declined 5.4 percent in 2012 and trades at 4.6 times analysts’ earnings estimates for member companies. That compares with a 3.7 percent retreat for Brazil’s Bovespa (IBOV) index, which trades at 9.2 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index (SHCOMP) trades at 10.3 times estimated earnings, and the BSE India Sensitive Index (SENSEX) has a ratio of 12.8.
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