Yandex NV (YNDX) rose the most in three weeks on prospects the Russian Internet company’s new social- media search application will lure more mobile users and boost advertising revenue.
Yandex climbed 2 percent to $23.20 on the Nasdaq Composite Index yesterday, pushing its valuation to 20.1 times estimated earnings, the highest level since Jan. 16. The Bloomberg Russia- US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. rallied 0.6 percent. RTS stock index futures rose 0.9 percent to 161,920 by 4:38 p.m. in Moscow.
The owner of Russia’s most-used search engine, Yandex debuted its Wonder app for U.S. users yesterday and may expand access to Russia and Turkey, Ochir Mandzhikov, the company’s press chief, said by phone from Moscow. The app allows Apple Inc. (AAPL) iPhone and iPod Touch users to retrieve information from social websites such as Facebook (FB) and Twitter. Facebook Inc. unveiled a search tool for its social network Jan. 16.
“It’s a very smart move which shows that Yandex is testing other potential areas for future growth,” Konstantin Belov, an analyst at UralSib Financial Corp. who rates Yandex buy, said by phone from Moscow yesterday. “Yandex wants to utilize its technology at the most popular social websites and investors appreciate that.”
Facebook blocked by Wonder three hours after it was released, Yandex’s Mandzhikov said by phone today, confirming a report yesterday on the TechCrunch website.
‘Solve the Problem’
“We will contact Facebook as soon as possible to figure out the reason and ways to solve the problem,” Mandzhikov said by phone. The app is an experiment designed to target U.S. users, and Wonder functions properly with online photo sharing site Instagram, location app Foursquare and Twitter, he said.
The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, added 0.2 percent to $30.48 in New York yesterday, the highest level since Jan. 4. The RTS Volatility Index, which measures expected swings in the stock futures, fell 2.7 percent to 19.9 points today.
Yandex rose to the highest level since Jan. 15 in New York on trading volume that exceeded the average for the past tree months by almost three times, data compiled by Bloomberg show.
Users of the Wonder app can type or ask questions using their mobile devices and get answers based on the recommendations of their friends on social websites, Yandex said in its statement yesterday.
The Moscow-based company, which beats Google (GOOG) Inc. as the most-used search engine in Russia, rolled out yandex.com.tr for Turkey in September 2011, offering local maps with traffic information and street views, free e-mail, news aggregation, image and video search and Turkish-English translation services.
Yandex plans to boost its market share in Turkey to as much as 35 percent by end-2017, from 1 percent in 2012, Yandex Turkey Chairman Mehmet Ali Yalcindag said at a Sept. 20 news conference in Istanbul. Google has a 60 percent share of Turkey’s market, he said.
Yandex got 90 percent of revenue from text-based advertising in the third quarter and makes almost all of its money in Russia. The company’s three-month average share of searches there has been above 60.4 percent since May 2012, compared with about 26 percent for Google, owner of the world’s largest search engine.
International expansion by Yandex “is fine in theory, while in practice it’s tough to compete with such a skilled rival as Google,” David Ferguson, an analyst at Renaissance Capital Ltd. said by phone from Moscow.
Yandex’s net income will probably advance to a record $365.8 million this year from an estimated $275.2 million in 2012, according to the mean of six analysts’ estimates compiled by Bloomberg. Revenue will increase to $1.26 billion in 2013 from an estimated $950 million in 2012, according to the mean of 13 projections.
Polyus Gold International Ltd. (PGIL) rose by the most in six months in New York as billionaire Mikhail Prokhorov’s Onexim Holdings Ltd. agreed to sell his 37.8 percent stake in the Russian gold mining company to a group of investors, according to three people with knowledge of the plan.
Onexim and a group of investors selected by billionaire Suleiman Kerimov’s Nafta Moskva, which currently owns 40.2 percent of Polyus, sought approval from the U.K. Takeover Panel for the deal, the people said, asking not to be identified as the information is private.
Global depositary receipts of Polyus rallied 7.3 percent to $3.38 in New York yesterday, the highest close since Dec. 18. The gold producer jumped 2.9 percent to 224.75 pence, or $3.53, in London today, adding to yesterday’s 9.7 percent surge.
“The market appreciates that Kerimov finally gets to define Polyus’s strategy, which means he will look into merging Polyus with Polymetal,” Alexei Morozov, an analyst at UBS AG, said by phone from Moscow yesterday, referring to St Petersburg- based gold and silver miner Polymetal International Plc. “The merger would make a lot of sense and would be a very good thing for both companies.”
CTC Media Inc. (CTCM) was the second-biggest gainer after Polyus Gold on the Russia-US gauge yesterday, rallying 5.7 percent to $9.78, the highest level since May. 14.
CTC’s television channel, the company’s biggest source of revenue, saw its share of viewers 4 years and older rise to the fourth biggest in the nation for the first time since March 2012, TNS Global said in a report released yesterday.
Oil, which together with natural gas made up 50 percent of Russian budget revenue in 2011, rose as U.S. jobless benefit claims fell to a five-year low and an index of U.S. leading indicators rose in December, signaling that the economy is poised to keep growing through the first half of this year.
Crude oil for March delivery gained 0.8 percent to $95.95 a barrel on the New York Mercantile Exchange yesterday. Brent oil for March settlement increased 0.4 percent to $113.28 a barrel on the London-based ICE Futures Europe exchange. Urals crude, the country’s main export blend, climbed 0.5 percent to $112.66 a barrel yesterday, the highest level since Oct. 16.
The ruble added 0.1 percent to 30.03 per dollar today, the highest level since May 5. Ruble futures show the currency strengthening 0.3 to 30.258 per dollar.
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