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Russia Stocks Climb for First Day in Three as Crude Oil Rallies

Russian stocks rose for the first time in three days as crude oil, the nation’s chief export earner, climbed and as investors awaited details of a European Central Bank plan to ease the region’s debt crisis.

The Micex Index (INDEXCF) increased 1.1 percent to 1,437.56 by 12:32 p.m. in Moscow. OAO Mechel (MTLR), Russia’s biggest coking coal producer, gained 1.5 percent, while OAO Severstal added 1.6 percent. Oil companies advanced, with OAO Gazprom Neft and preferred shares of OAO Surgutneftegas rising 1.7 percent and 2.4 percent respectively.

Crude rose 1.2 percent to $96.49 in New York. Oil and gas contribute about 50 percent to Russia’s state revenue. ECB President Mario Draghi favors unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said before bank policy makers meet today.

“The market players are keen to get some clarity on the possible bond purchases,” Natalia Orlova, chief economist at Alfa Bank in Moscow, said by phone. “The mood is very positive, even some details from the ECB today can drive up the market.”

The dollar-denominated RTS Index (RTSI$) advanced 1.5 percent to 1,412.06, heading for the biggest gain since Aug. 21.

Standard & Poor’s GSCI Index of raw materials gained 0.8 percent to 673.73.

Sberbank, VTB

OAO Sberbank climbed 0.8 percent to 93.73 rubles as the ruble strengthened for the third day. A stronger ruble encourages Russians to deposit and abstain from converting ruble deposits, Sberbank’s main source of funding. VTB Group rose 0.9 percent to 5.31 kopeks. VTB Capital said Sberbank remains its “top pick” in Russia, citing the lender’s discount to emerging-market peers in a note today. The stock trades at 5.9 times estimated earnings.

OAO Aeroflot dropped 0.2 pecent to 42.55 rubles, retreating for the third day. Russia’s biggest airline said yesterday first-half net income fell 90 percent as operating costs surged.

The Micex trades at 5.3 times estimated earnings and has rallied 2.5 percent this year. That compares with a multiple of 9.8 times and a 2.9 percent advance for the MSCI Emerging Markets Index.

Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

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

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