Oil Hits Futures as MSCI Lifts Sberbank: Russia Overnight
Russian stock futures sank in New York as crude, the nation’s biggest export earner, dropped for the third time in four days.
Futures expiring in December on Russia’s RTS Index slipped 0.4 percent to 137,240 in U.S. trading hours as expected swings in the contracts rose 1.1 percent, according to the Russian Volatility Index. OAO Sberbank (SBRCY), Russia’s biggest lender, led a 0.3 percent advance in the Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. VimpelCom Ltd. (VIP) and OAO Mobile TeleSystems (MBT) tumbled as rival OAO MegaFon resumed marketing for its initial share offering.
Oil sank 1 percent yesterday after reports showed American jobless claims rose more than economists estimated last week and manufacturing shrunk in New York and Philadelphia. U.S. stockpiles of oil -- which along with natural gas contributes about 50 percent of Russian government revenue -- rose last week as production jumped to an 18-year high, the Department of Energy said yesterday.
“When oil slumped suddenly around midday, the Russian futures went down with them,” Ilya Kravets, who helps manage $100 million in assets, including Russian equities, at Daniloff Capital LLC, said by phone in New York yesterday. “The futures are reflecting what we’ll see in the market, which is going to be a letdown primarily because of the oil price.”
The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, added 1.1 percent to $26.54 in New York, rising for the first time in three days. Russia’s benchmark Micex Index (INDEXCF) gained 1 percent yesterday to 1,386.25 as Israeli air strikes on the Gaza Strip stoked gains in oil during the European trading day.
Crude oil for December delivery slumped to $85.45 a barrel by the end of trading yesterday on the New York Mercantile Exchange, extending the decline this year to 14 percent. Brent oil for January settlement fell 0.4 percent to $108.01 on the ICE Futures Europe exchange, while Urals crude, Russia’s chief export blend, slipped 0.8 percent to $107.17.
American depositary receipts of state-controlled Sberbank surged 2.8 percent to $10.84 in New York, the biggest one-day climb since Sept. 14. The advance followed a 1.7 percent climb in the lender’s Micex-traded stock to 86.12 rubles, or the equivalent of $2.72. The ADRs, which equal four ordinary shares, traded at the smallest discount to Moscow since Oct. 31.
Moscow-based Sberbank had its weighting in MSCI Inc.’s Russia Index boosted by 2.5 percentage points to 14.4 percent, according to a report on MSCI’s website. The increase “helps bring funds into the stock,” as many global portfolios track MSCI’s indexes, Stanislav Kopylov, who helps manage about $3.4 billion at UralSib Capital in Moscow, including Sberbank shares, said by phone yesterday.
Futures on the ruble were little changed in New York at 31.86 per dollar. Russia’s currency was also steady in Moscow yesterday at 31.6624 versus the greenback.
VimpelCom, the world’s sixth-biggest mobile phone company by subscribers, dropped 2.6 percent to $10.66 in New York yesterday, a two-month low. VimpelCom got 42 percent of revenue from Russia last year, according to data compiled by Bloomberg.
Nordic phone company Telenor ASA (TEL), which has been engaged in a fight for control of VimpelCom with fellow investor Altimo, has no plans to sell its stake in the company, Chief Financial Officer Richard Olav Aa said in an interview in Barcelona yesterday. Telenor is a long-term shareholder in VimpelCom, he said.
‘Feeling the Hit’
MegaFon, Russia’s second-largest mobile-phone operator, plans to raise as much as $2.1 billion in the biggest initial public offering by a Russian company since United Co. Rusal, the world’s biggest aluminum producer, issued stock almost three years ago. MegaFon is resuming marketing for its IPO after suspending the campaign last month to amend details of the prospectus.
Mobile TeleSystems, Russia’s biggest mobile company known as MTS, sank 1.5 percent to $16.57 in the U.S., the lowest level since June 25. MTS’ Micex-listed shares added 1.3 percent in Moscow, shrinking their discount to the ADRs to 1.9 percent, the least in a year, data compiled by Bloomberg show.
“Both VimpelCom and MTS are feeling the hit now that the MegaFon IPO is back on,” Daniloff’s Kravets said. “VimpelCom is down a little more because MegaFon is taking some market share from them.”
United Co. Rusal, the world’s largest aluminum producer, dropped 0.7 percent to HK$4.43 in Hong Kong trading as of 11:02 a.m. local time. The MSCI Asia Pacific Index gained 0.6 percent.
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