Russian shares traded in New York rose for the first time in five days and OAO RusHydro rebounded as analysts speculated a yearlong dispute over its investment program is ending.
American depositary receipts of Russia’s biggest renewable energy producer climbed 1.9 percent to $2.66 yesterday after shares in Moscow added 0.7 percent. OAO Mechel rallied the most in a month. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in New York added 0.4 percent to 98.12 yesterday while RTS stock-index futures expiring in December fell.
RusHydro called yesterday a general shareholders’ meeting for Nov. 16 to approve a capital increase that will help with its $12.3 billion expansion program through 2016. Shareholders had disagreed on whether Russia should boost its stake in the company and pump money or allow state-owned OAO Rosneftegaz to obtain a stake in the producer. The government had frozen power tariffs for 18 months to July, reducing RusHydro’s revenue.
“The shareholders’ meeting announcement today signals this whole drama is nearing the end, which is highly appreciated by the market,” Sergey Beiden, an analyst at Otkritie Financial Corp. in Moscow, said by phone yesterday. “We are very near the final decisions and that is big progress.”
The Market Vectors Russia ETF, the biggest U.S.-traded exchange-traded fund that holds Russian shares, rose 0.7 percent to $28.89 yesterday. The RTS Volatility Index slid 0.1 percent to 28.99.
U.S. Labor Department reported yesterday that claims for jobless benefits fell to 339,000 last week, the lowest level since February 2008.
China’s biggest banks are resisting government pressure to lower borrowing costs amid an economic slowdown as they seek to maintain the profitability of their lending operations, officials at the top four lenders said.
Futures on the dollar-denominated RTS Index fell 0.5 percent to 147,760.
“As people analyze the latest claims figure there is a question of how sustainable it is,” Ilya Kravets, who helps manage $100 million of investments at ED Capital, said by e-mail from New York yesterday. “China may not be able to reaccelerate growth as some have expected. In this case, Russia would surely suffer as one of the major global commodity exporters.”
RusHydro needs the cash to expand its production facilities throughout the country. The company plans to invest 98.3 billion rubles ($3.2 billion) for development of its production facilities in 2012, RusHydro said on its website. It plans to invest a total of 381.8 billion rubles through 2016.
The government owned 60.5 percent of the company as of June 30 according to RusHydro’s website. Instead of allowing state-controlled Rosneftegaz to buy a stake in RusHydro, Russia will use dividends it will receive from Rosneftegaz to help finance RusHydro’s investment program, Economy Minister Andrei Belousov said in Moscow on Oct. 10.
“The market expects the value of the company will increase as the government will buy RusHydro’s new shares with a premium to the market price,” Beiden said.
RusHydro settled at 84.97 kopeks, or 2.7 U.S. cents, in Moscow yesterday.
Oil, which together with natural gas accounted for half of state budget revenue in 2011, rose 0.9 percent to $92.07 a barrel on the New York Mercantile Exchange. Prices are up 7.3 percent from a year earlier.
Brent oil for November settlement climbed 1.2 percent to $115.71 a barrel on the London-based ICE Futures Europe exchange. Urals crude, Russia’s chief export blend, gained 1.8 percent to $114.58 a barrel yesterday.
Foreign Stock Futures
The Moscow Exchange may start trading foreign stock futures next year and is planning to expand foreign currency futures trading, Roman Sulzhik, managing director of Moscow Exchange’s derivatives market said by e-mail yesterday.
“Right now the Moscow Exchange is developing the parameters for trading foreign stock futures,” he said. “The launch decision may be taken in early 2013.”
The Standard & Poor’s GSCI gauge of 24 commodities climbed to the highest level in three weeks, adding 1.1 percent to 671.84.
Mechel, Russia’s biggest producer of coal for steelmakers, surged 4.6 percent to $7.04 in New York. The ADRs settled at a 1.9 percent premium to the company’s Moscow-traded shares, the most since Sept. 26. The stock rose 0.8 percent to 214.50 rubles, or $6.9, in Moscow yesterday.
OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, gained 0.8 percent to $15.54. The company’s shares traded on the Micex Index advanced 0.2 percent to 4,831 rubles, or $155.73. One ADR equals one-10th of a Moscow-listed share.
United Co. Rusal, the world’s largest aluminum producer, rose for the first time in five days, adding 1.4 percent to HK$4.38 as of 1:10 p.m. in Hong Kong trading. The MSCI Asia Pacific Index gained 0.5 percent.