Russian stocks climbed for the third day this week as prospects improved for containing Europe’s debt crisis. OAO Concern Kalina, a Russian cosmetics maker, jumped to its highest on record.
OAO Sberbank, Russia’s biggest lender, gained 1.5 percent, while OAO Novolipetsk Steel added 1.2 percent. Kalina surged 40 percent to the strongest price since its shares started trading in 2004 after the Wall Street Journal said Unilever NV is close to acquiring the company in a deal worth $850 million. The 30- stock Micex Index added 0.7 percent to 1,398.25 as of 10:39 a.m. in Moscow.
Russian stocks are benefiting as European Union leaders take steps to prevent contagion from the crisis that has spread from Greece across the region, the main market for Russian exports. The Micex, which sank 12 percent in September, is up 3.3 percent this week.
“If Europe gets its act together, and global growth isn’t as bad as the worst fears indicate then Russian equities are really oversold here,” Arjun Jayaraman, who manages $400 million in emerging-market equities at Causeway Capital Management in Los Angeles, said in a phone interview.
Russia’s trade with EU countries accounted for $453.6 billion, or almost half of the country’s total foreign trade turnover in January through July 2011, according to Russia’s Federal Service of State Statistics.
Cheapest Stocks
Russian stocks are the cheapest among the so-called BRIC nations, with shares in the Micex trading at an average 4.9 times analysts’ earnings estimates, compared with a price-to- earnings ratio of 9.6 for stocks in Brazil’s Bovespa index, 11.2 for the Shanghai Composite Index and 14.3 for the BSE India Sensitive Index. The Micex is down 17 percent this year. The gauge may climb 0.3% at the open today, according to Alfa Bank.
Slovakia’s lawmakers backed the European Financial Stability Facility yesterday, after parliament had failed to approve the measures on Oct. 11. The expanded powers of the 440 billion-euro ($600 billion) EFSF would allow the fund to buy the debt of stressed euro-area nations, aid troubled banks in the region and offer credit lines to governments. Russia sells commodities, including natural gas, oil and base metals, to Europe.
“The markets’ further out year-end direction is almost entirely dependent on EU policymakers and their action,” Julian Rimmer, a trader of Russian shares at CF Global Trading in London, wrote in e-mailed response to questions yesterday.
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