Russian ADRs Jump to One-Month High on Crude, Ukraine OutlookRichard Richtmyer
U.S.-traded Russian stocks rallied to a one-month high as oil rose to near the strongest level this year and concern continued to ease that the country will face increased sanctions linked to the Ukraine conflict.
Qiwi Plc gained the most in three months in New York before its first-quarter earnings release scheduled for Thursday. The electronic-payment service provider was the best performer in the Bloomberg Russia-US Equity Index, which increased 0.5 percent. VimpelCom Ltd. advanced after saying it is in talks to combine its Italian mobile-phone business with a competitor’s.
Brent crude settled at $66.81 a barrel after slipping 5 cents in London. The oil grade traders use to price Russia’s main export blend is selling for above this year’s average price of $57.58. U.S. Secretary of State John Kerry had his first face-to-face meeting with President Vladimir Putin in two years on Tuesday as a cease-fire in the Ukraine conflict remains in force.
“Oil is rising, the ruble is strengthening, the central bank is lowering interest rates and all that helps sustain companies focused on domestic demand, while oil producers also look attractive,” Mattias Westman, the London-based founder of Prosperity Capital Management, which manages about $2 billion in Russian assets, said by phone Wednesday. “The intensity of the Ukraine crisis has decreased. The truth is that people are becoming less pessimistic as the bad things they had feared last year have not materialized.”
The ruble strengthened 1.3 percent against the dollar, extending this year’s rally to 23 percent. Policy makers have lowered the benchmark interest rate by 450 basis points to 12.5 percent as the currency rebounded from a 46 percent decline in 2014.
Qiwi surged 6 percent to $29.88. VimpelCom jumped 4.5 percent to $5.79. The Bloomberg gauge of U.S.-traded Russian stocks advanced to the highest since April 16.
The Market Vectors Russia ETF, the largest exchange-traded fund tracking the nation’s stocks, slipped 0.5 percent to $20.48. Futures on the dollar-denominated RTS Index declined 0.7 percent to 106,830 in U.S. hours.
United Co. Rusal lost 0.2 percent to HK$4.78 at 10:34 a.m. in Hong Kong.
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