RTS Futures Climb on Oil as Exchange Brews IPO: Russia Overnight

A rally in crude oil stoked gains in Russian stock futures as the Moscow Exchange prepared to sell shares in what is being targeted as the biggest initial public offering on the nation’s bourse since 2007.

Futures expiring in March on the dollar-denominated RTS Index rose 0.3 percent to 158,850 in U.S. hours and the ruble extended an advance against the dollar-euro basket. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. fell for the first time in three days. American depositary receipts of OAO GMK Norilsk Nickel slumped to an eight-week low.

Crude, which together with natural gas contributes about 50 percent of Russian budget revenue, climbed 0.3 percent as United Nations nuclear inspectors failed to reach a deal with Iran and U.S. jobless claims plunged. The Moscow Exchange is seeking at least 15 billion rubles ($498 million) in the sale, which would make it the biggest IPO on Russian markets since OAO Polymetal’s $630 million offer in 2007, data compiled by Bloomberg show.

“High oil prices make everyone who invests in Russia, regardless of sectors, feel better,” Mansur Mammadov, who helps manage $100 million in Kazimir Partners Ltd., said by phone from Moscow yesterday. “The Moscow Exchange IPO is a very good opportunity for long-term investors and revives interest in Russia even among those who don’t participate.”

The Bloomberg Russia-US Index of Russian companies listed in the U.S. declined 0.9 percent to 103.71, the lowest level since Jan. 23.

Metalloinvest Talks

Norilsk Nickel, the world’s largest producer of the metal, was the worst performer on the Bloomberg Russia-US gauge, dropping 4 percent to $18.62 in the biggest retreat since June 21. The stock fell 3.6 percent to 5,673 rubles, or the equivalent of $188.40, in Moscow yesterday.

Billionaire Alisher Usmanov’s Metalloinvest, which already holds 4 percent of Norilsk Nickel, is in preliminary discussions with other Norilsk shareholders about swapping Metalloinvest’s Udokan copper deposit for shares of Norilsk, three people said, asking not to be identified because the information is private.

The Moscow Exchange narrowed the price band for its initial public offering to 55 rubles to 57 rubles as investors bid at the low end of the initial range, according to two people with knowledge of the matter.

The bourse, which runs Russia’s 50-stock Micex and dollar-based RTS indexes, said Feb. 4 it plans to sell shares at 55 rubles to 63 rubles. The stock will trade on its own platform, after marketing in the U.S., Europe and Russia. A sale at the bottom of the range would value the company at $4 billion.

CTC Gains

CTC Media Inc., Russian television company, rose 1.3 percent to $10.33, the highest level since Feb. 4. CTC TV, the company’s main television station, saw its average daily audience increase in the week to Feb. 10, regaining the fourth-most-watched rank among viewers, TNS Global said in an e-mailed statement yesterday.

Yandex NV, Russia’s biggest Internet company, increased 2.6 percent to $25.66, the highest level since April, as trading volume almost doubled from the daily average over the past three months, data compiled by Bloomberg show.

Credit Suisse Group AG increased its price estimate on the shares to $33 from $29, reiterating a rating equivalent to buy.

“We like Yandex for its solid technological platform and strong execution in Russia despite competitive threats,” Olga Bystrova, an analyst at Credit Suisse in Moscow, wrote in an e-mailed report yesterday.

ETF Slips

The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, decreased 1.1 percent to $30.32, the biggest drop in a week. The RTS Volatility Index, which measures expected swings in the stock futures, declined 1.3 percent to 21.51.

Crude oil for March delivery in New York climbed to $97.31 a barrel. Brent oil for April settlement increased 0.1 percent to $118 a barrel on the London-based ICE Futures Europe exchange while Urals crude, Russia’s chief export blend, fell 0.3 percent to $116.21.

The ruble weakened 0.1 percent to 30.10 per dollar yesterday and gained 0.3 percent to 34.6360 against the dollar-euro basket used for minimizing swings that hurt exporters. Ruble futures show the currency 0.1 percent stronger at 30.247 per dollar.

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