RTS Futures Gain as Obama Win Seen Lifting Oil
Futures expiring in December on Moscow’s RTS Index gained 0.9 percent to 145,340 in New York, and expected swings in the contracts slid for the first time this week. The Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. rose 0.8 percent, led by oil producer OAO Surgutneftegas. (SGTPY) CTC Media Inc. surged the most since Sept. 14 on speculation it will report its highest third-quarter profit since 2010 today.
Obama won re-election over Republican challenger Mitt Romney, according to television network projections. Bond purchases under Federal Reserve Chairman Ben Bernanke have swelled the amount of dollars on the market, supporting crude oil’s 129 percent rally since Obama took office in January 2009. An Obama victory will stoke Russian stock gains as the incumbent has a “more constructive” view of relations with Russia than Romney, East Capital, which manages about $2.4 billion of Russian assets, said before vote-counting ended.
The RTS futures are “reflecting an Obama win already,” Luis Saenz, head of equity sales and trading at BCS Financial Group, said by e-mail yesterday from London. “An Obama win is a clear win for Russia. Aside from the positive political ties, Obama’s administration would continue to support a weaker dollar which good for the price of oil.”
Based on latest projections, Obama had won 275 electoral votes, more than the 270 needed to win. Romney had 203.
Crude oil for December delivery on the New York Mercantile Exchange dropped 0.3 percent to $88.41 a barrel in electronic trading as of 12:43 p.m. in Hong Kong. The contract climbed 3.6 percent yesterday, the biggest gain since Oct. 4. Prices are down 11 percent this year.
Oil, which along with natural gas contributed about 50 percent of Russia’s government revenue last year, rose on forecasts that U.S. gasoline supplies dropped after Hurricane Sandy forced the shutdown of East Coast refineries and as Americans went to the polls.
Brent oil for December settlement increased 3.1 percent to $111.07 a barrel on the ICE Futures Europe exchange yesterday. Urals crude, Russia’s chief export blend, added 2.2 percent to $109.82, the most since Oct. 4.
The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, rose 0.7 percent to $28.38 yesterday. The RTS Volatility Index, which measures expected swings in futures, slipped 0.2 percent to 27.41 points.
‘Better for Russia’
Surgutneftegas, the nation’s fourth-biggest crude producer, jumped 4.8 percent to $6.21, the highest level since Oct. 26. The company’s preferred shares advanced 2.8 percent to 19.81 rubles, or 63 U.S. cents, in Moscow yesterday. One ADR equals 10 preferred shares. Futures on the company’s ordinary shares increased 0.5 percent.
The Micex Index (INDEXCF) added 0.5 percent to 1,446.46 in Moscow yesterday, climbing for a fourth day in the longest streak of gains since July 30. If Obama wins, Russian stocks will rise for another two days, Marcus Svedberg, chief economist at East Capital, said in a phone interview yesterday.
“An Obama win would be better for Russia,” he said. “The Democrats tend to have a more constructive view on relations with Russia. The rhetoric coming from Romney has been much harsher.”
CTC Media (CTCM), which owns the CTC television channel, climbed 3.4 percent to $8.77, the biggest gain since Sept. 14, in New York yesterday.
Chief Executive Officer Boris Podolsky and Chief Investment Officer Nikolay Surikov will host a conference call with investors and analysts at 5 p.m. in Moscow today, following the release of the company’s earnings for the third quarter earlier in the day.
CTC Media will probably say today that third-quarter net income rose 41 percent to $24.4 million, according to the mean estimate of four analysts surveyed by Bloomberg.
The S&P GSCI Index of 24 commodities surged 2.3 percent yesterday, the most since Oct. 4.
OAO Mechel (MTLR), Russia’s biggest producer of coal for steelmakers, gained 2.4 percent to $6.73 in New York. The stock rose 0.9 percent to 209.90 rubles, or $6.69, in Moscow yesterday. Futures on the company’s stock added 3.4 percent.
Contracts on the ruble advanced 0.4 percent to 31.552 per dollar yesterday.
United Co. Rusal, the world’s largest aluminum producer, rose 0.4 percent to HK$4.42 in recent Hong Kong trading. The MSCI Asia Pacific Index gained 0.4 percent today.
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