Russian stocks rallied the most in a year as oil producers in the world’s biggest energy exporter climbed and OAO Gazprom, the nation’s largest company, surged on bets a weaker ruble will boost earnings.
The Micex Index gained 3.4 percent to 1,422.40 by the close in Moscow, the most since September 2012 and the best-performance among 17 markets in eastern Europe tracked by Bloomberg. OAO Rosneft, Russia’s biggest oil producer, added 4.3 percent to 259.74 rubles, the most since November. Gazprom, the nation’s natural-gas export monopoly, jumped 6 percent, the strongest increase since May 2010.
Crude oil advanced 0.6 percent to $107.91 a barrel in New York after a U.S. Senate panel authorized a limited military strike in Syria. Russia gets about 50 percent of its budget revenue from the oil and gas industries. The ruble sank 0.2 percent to the dollar, taking its slide this year to 9 percent.
“The current environment of strong oil prices and a weak ruble is perfect for the Russian oil and gas sector,” which has local-currency expenses while earning dollars from exports, Timur Salikhov, an oil and gas analyst at BCS Financial Group in Moscow, said by e-mail. “Gazprom is among the most sensitive names to the oil-price moves, along with Rosneft.”
With U.S. President Barack Obama in St. Petersburg today for a summit of global leaders, his Russian counterpart Vladimir Putin yesterday denounced a potential U.S. attack on Syria as a violation of international law. Obama told reporters the two countries’ relations have “hit a wall.”
OAO Novatek, Russia’s second-largest natural-gas producer, increased 4 percent to 388.77 rubles after signing an agreement with China National Petroleum Corp., or CNPC, for the sale of a stake in its Yamal liquefied natural gas project.
Novatek added 4.3 percent to $128.10 and Gazprom increased 5.6 percent to $8.32 in London. While Gapzrom and CNPC agreed to strategic terms on gas shipments earlier today, Putin’s spokesman Dmitry Peskov said the companies still have to agree on a gas price for the deal.
“Oil prices remain high because of the Syria strike risks,” Oleg Popov, who manages $1 billion of securities for Allianz Investments, the asset-management arm of Europe’s biggest insurer, said by phone from Moscow. Climbing commodity prices give budget revenues a boost, helping “oil producers and consumer companies alike,” he said. Consumer stocks had the biggest increase on the Micex with a 4.8 percent average gain.
OAO Uralkali, Russia’s largest potash producer, rose 1.8 percent to 165.13 rubles. The stock rallied 2.3 percent to $24.75 in London.
The Aug. 26 arrest of Uralkali’s Chief Executive Officer Vladislav Baumgertner in Minsk was “unacceptable,” according to an e-mailed government statement, citing comments by Russia’s Deputy Prime Minister Arkady Dvorkovich to Belarus First Deputy Prime Minister Vladimir Semashko. Inter-governmental working groups will continue meeting next week, the statement said.
Mail.ru Group Ltd. surged as much as 5.9 percent, adding 4.7 percent to $35.50 in London. Billionaire Alisher Usmanov’s Internet company sold the remaining 14.2 million Facebook Inc. shares it held for more than $525 million, according to a statement today.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg, with shares trading at 3.7 times 12-month estimated earnings, compared with a multiple of 10.1 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index added 3.2 percent to 1,339.80.
The volume of shares traded on the Micex was 74 percent above the 30-day average today, while 10-day price swings jumped to 20 after falling to the lowest level since July 31 yesterday, data compiled by Bloomberg show.
The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York rose 2.2 percent today, while the Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, gained 2.9 percent to $27.04.