Putin’s Asset Sale Plan Spurs Rostelecom Rally: Russia Overnight
American depositary receipts of Russia’s biggest long- distance phone operator, increased 4.8 percent to $24.50 yesterday in New York, the highest level since May 15, following a 1.3 percent gain in Moscow shares. The Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in New York and futures on Moscow’s dollar-denominated RTS Index advanced.
Russia will push ahead with its plan to sell state assets and will look for the right moment for each offering, Deputy Prime Minister Arkady Dvorkovich told investors at a conference in London yesterday. The government plans to sell Rostelecom after merging it with state-controlled telecommunications company OAO Svyazinvest by April 2013, according to Alfa Bank.
“The statement signals the government is serious about reducing its stakes in some of the country’s most interesting companies, such as Rostelecom, and investors appreciated that,” Iouli Matevossov, an analyst at Alfa Bank, said by phone yesterday from Moscow. “The state is not an efficient owner and reduction of its stake would allow better efficiency.”
The Market Vectors Russia ETF (RSX), the biggest U.S.-traded exchange-traded fund that holds Russian shares, rose 1.3 percent to $29.15, the highest level since May 2. The RTS Volatility Index retreated 0.2 percent to 28.77.
Russia approved an asset-sale plan on June 7 targeting revenue of 300 billion rubles ($9.3 billion) this year. The state plans to sell stakes in OAO Sberbank, the country’s largest lender, tanker operator OAO Sovcomflot and fertilizer maker OAO Apatit, Economy Minister Andrei Belousov said at a government meeting at the time.
The Bloomberg Russia-US Equity Index increased 0.9 percent to 99.39, the highest level since May 3. RTS stock-index futures added 0.1 percent to 148,050.
The Federal Open Market Committee starts a two-day meeting today amid speculation it will introduce a third round of asset purchases. Fed Chairman Ben S. Bernanke said on Aug. 31 that he wouldn’t rule out more economic stimulus.
The Federal Constitutional Court in Karlsruhe decides today on whether Germany can participate in the 500 billion-euro ($640 billion) European Stability Mechanism, which offers loans to member states and may buy their bonds to cut borrowing costs.
‘Most Important Factors’
“All eyes are on the Fed and the Constitutional Court in Germany,” Yan Gloukhovski, a trader at Alfa Capital Markets in said by phone yesterday from London. “Those are the two most important factors that will give us a little more clarity.”
Rostelecom jumped in New York while in Moscow the stock rose to 128.53 rubles, or $4.08, the highest since May 3. One ADR equals six ordinary shares.
VimpelCom Ltd., (VIP) the world’s sixth-biggest mobile phone company, rose to a six-month high, climbing 1.7 percent to $11.73. Deutsche Bank AG cut its recommendation on the shares to hold from buy, according to an e-mailed report yesterday.
Telenor ASA, which owns 39.5 percent of the voting rights in VimpelCom, said last month that Russian regulators should drop “immediately” their lawsuit against the company and should allow VimpelCom to pay 2011 dividends. Russia’s Anti-Monopoly Service, known as FAS, is disputing the Nordic company’s right to raise its stake after it bought 11.3 percent of VimpelCom from Weather Investments II in February.
‘Not Over Yet’
“The current conflict between Telenor and Altimo is not over yet,” Igor Semenov, an analyst at Deutsche Bank in Moscow, wrote in the report. “Even after an eventual resolution of the current dispute, differences of opinion on strategic developments between the two shareholders are nearly guaranteed in the future.”
OAO Mechel (MTL), Russia’s largest producer of coal for steelmakers, jumped 4.7 percent to $7.09, the highest level since Aug. 10. The company’s Russian stock was little changed at 218.80 rubles, or the equivalent of $6.95.
The Standard & Poor’s GSCI Spot Index of 24 commodities advanced 0.5 percent to 681.05 yesterday, to the highest level since May 1.
Crude for October delivery gained 0.7 percent to $97.17 a barrel on the New York Mercantile Exchange yesterday, the highest settlement since Aug. 22. The five-day increase was the longest since July 19. Prices are 1.7 percent lower this year.
Brent oil for October settlement increased 0.5 percent to end at $115.40 a barrel on the London-based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, fell 0.4 percent to $112.37 yesterday.
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