Russian (INDEXCF) stocks climbed as oil traded at a four-month high and bank shares rose before a U.S. Federal Reserve statement that may signal more economic stimulus. The Micex Index added 0.3 percent to 1,554.43 by 2:04 p.m. in Moscow, paring yesterday’s 0.8 percent decline. Of 50 stocks, 24 dropped and 26 gained. The dollar-denominated RTS Index (RTSI$) increased 0.5 percent to 1,632.64. Financial stocks led the advance among nine industry groups, rallying 0.9 percent on average. OAO Sberbank, Russia’s biggest lender and the stock with the heaviest weighting in the gauge, jumped 1.5 percent, poised for an April 2011 high. Crude oil traded up 0.2 percent at $97.77 a barrel in New York. Russia receives about half of its budget revenue from oil and natural gas. The Federal Open Market Committee will renew its commitment to asset buying during a two-day meeting that started yesterday, after determining the benefits from the program exceed any risk of inflation or financial instability, according to economists surveyed Jan. 24-25. “The Micex has entered new heights, oil is expensive, offering support to the market,� Alexander Ivanischev, the head of research at Infina Investment Co. in Moscow, said by phone. “The Federal Reserve is likely to confirm its monetary easing policy today. The Sberbank rally reflects a change in investor sentiment, there’s a greater openness to risk assets.� Sberbank, Surgutneftegas Sberbank increased to 108.13 rubles. The lender added as much as 1.3 percent yesterday before closing down 0.4 percent. Preferred shares of OAO Surgutneftegas rallied as Citigroup Inc. named Russia’s fourth-largest oil producer a top pick in the oil and gas sector and raised its price estimate to 99 cents. Citigroup cited “strong� price growth, a “generous� dividend policy and expectations the stock will benefit from the introduction of a so-called T+2 settlement on the Moscow Exchange, according to today’s e-mailed note. The preferred stock rose 3.1 percent to 22.952 rubles, the highest intraday level since February 2007. The amount of shares traded was 39 million, equivalent to about 1.6 times the three- month average. BCS Financial Group recommended buying Surgut preferred and ordinary shares and selling the stock of OAO Rosneft, Russia’s biggest oil producer, in an e-mail today. Russian dividend-paying stocks will outperform this year as the government increases pressure on lifting payouts, according to UralSib Capital in an e-mailed note today. Dividend stocks tend to outperform the market between January and May, with February being the “strongest� month, according to UralSib. Volatility Declines The Micex’s 30-day volatility declined to 12.305. The number of shares traded on the gauge was 81 percent above the 10-day average, data compiled by Bloomberg show. Standard & Poor’s GSCI Index of commodities climbed 0.4 percent to 672.92 after rising 0.8 percent yesterday. Tin, nickel and lead rose on the London Metal Exchange. The Russian Depositary Index (RDXUSD) added 0.3 percent to 1,836.25. Depositary receipts of Sberbank led the gains at 1.6 percent. The Market Vectors Russia ETF (RSX), the largest dedicated Russian exchange-traded fund, was little changed at $30.97 yesterday. The RTS Volatility Index, which measures expected swings in the stock futures, increased 1.8 percent to 20.42. The Micex trades at about 5.7 times estimated earnings and has added 5.7 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which has gained 1.7 percent over the same period. Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg. To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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