Sberbank Leads Russia ADR Advance on Rate Outlook as Crude Jumps

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OAO Sberbank rose the most in a month, pacing a gain in U.S.-traded Russian stocks as investors bet the central bank will cut interest rates next week and oil prices rallied.

The country’s biggest lender advanced 3.8 percent to $5.27 in New York Wednesday. Oil producer OAO Surgutneftegas rallied 2.9 percent, the most among energy companies. The Bloomberg Russia-US Equity Index jumped 1.3 percent to a one-week high.

Russia’s American depositary receipts and bonds gained on speculation policy makers will reduce borrowing costs Monday amid slowing inflation. Oil, the country’s biggest export, continued its rebound from this year’s low as data that showed declining U.S. crude stockpiles eased concern that a global supply glut will weigh on prices.

“Sberbank is rising before the Monday meeting where the central bank is expected to cut the key rate,” Evgeny Malykhin, the chief investment officer at Aton Asset Management in Moscow, said by e-mail Wednesday. “Rising oil is spurring appetite for Russian assets.”

The Bank of Russia will probably cut its key rate by 100 basis points, according to the Bloomberg survey, bringing reductions this year to 550 basis points. That would almost reverse a 650 basis-point emergency increase in December to stem the ruble’s 46 percent slide last year.

Ruble Gains

The Bloomberg gauge of U.S.-traded Russian stocks has fallen 8.6 percent in the past month as Brent crude slipped to near the lowest level since April and a flareup in fighting in Ukraine stoked concern that the U.S. and its allies may intensify sanctions linked to the conflict. Oil selling for about three-fifths its average price over the past five years combined with the sanctions are pushing the economy toward what analysts forecast will be the first recession since 2009.

The ruble strengthened 2.3 percent against the dollar Wednesday as Brent, the oil grade traders use to price Russia’s main export blend, jumped 1.3 percent to $65.70 a barrel, rising for the third time in four days. Surgut jumped to $7.16 in New York. OAO Gazprom, the natural gas producer whose prices are linked to oil, gained 2.1 percent to $5.32.

The Market Vectors Russia ETF increased 2 percent to $18.59. Futures contracts on the dollar-denominated RTS Index expiring this month slipped less than 0.1 percent to 95,720 in U.S. hours.

Moscow-based aluminum producer United Co. Rusal fell 1.2 percent to HK$4.21 at 10:53 a.m. in Hong Kong.

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