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I remain a dissillusioned bear ;( Russia's RTS Stock Index Hits 2000 for First Time on Oil Prices By William Mauldin April 13 (Bloomberg) -- Russia's benchmark RTS Index surpassed the 2000 mark for the first time after surging crude prices increased demand for energy stocks in the world's biggest oil-producing nation. OAO Rosneft and OAO Lukoil led gains. Oil was little changed, close to $64 a barrel in New York, after jumping the most in two weeks yesterday on an International Energy Agency report showing that world supplies fell last month. The RTS, dominated by oil and gas companies, has doubled over the past 17 months, helping push the value of the country's stock market to $1.1 trillion. Higher commodities prices along with President Vladimir Putin's success in improving tax collection and consolidating control over the gas industry are helping spur the ninth straight year of economic growth since the government defaulted on debt and devalued the ruble in 1998. ``It's not surprising that Russia has delivered this kind of return, given the strength of the underlying economy, commodity prices and overall positive sentiment on global emerging markets,'' said Aivaras Abromavicius, who helps oversee $3.8 billion in Russia equities at East Capital in Moscow. Banking stocks have contributed about 294 index points to the gain in the last 17 months, according to Alexei Zabotkin, chief strategist at Deutsche Bank's Moscow brokerage unit. The estimate was based on a calculation he made as the RTS approached 2000. Oil and gas, which dominate the RTS and make up 68 percent of Russia's export revenue, contributed 284 index points to the 1000-point gain. The RTS added 1.8 percent to 2001.59 as of the close in Moscow. Lukoil, Sberbank Shares of OAO Lukoil, Russia's largest oil company, have risen 52 percent since Nov. 17, 2005. Meanwhile, shares of Sberbank, Russia's biggest bank, and OAO Unified Energy, the country's national electricity company, more than tripled. ``The energy stocks have substantially underperformed in this period,'' said Chris Weafer, chief strategist at Alfa Bank in Moscow. Sberbank benefited from the economy's commodity-driven boom, while Unified Energy and has risen on the government's plan to split up the electricity industry into more competitive generating, distribution and sales companies, Weafer said. Rosneft and Lukoil led today's advance. Rosneft climbed 5.2 percent to 229.28 rubles on the Micex Stock Exchange, and Lukoil climbed 0.9 percent to 2,194.62. Oil prices surged in New York yesterday after the close of Russian stock markets, with crude for May delivery jumping 3 percent to $63.85 a barrel. The contract slipped 3 cents, or less than 0.1 percent, to $63.82 on the New York Mercantile Exchange today. Sberbank, X5 Retail Revenue from oil and gas exports has flooded the broader economy, boosting earnings in industries ranging from telecommunications to beer. Gross domestic product probably will expand 6.2 percent this year, compared with 6.8 percent in 2006. Budget revenue from oil and gas will decline to 8.2 percent of GDP or 2.5 trillion rubles this year, Russian Finance Minister Alexei Kudrin has said. Oil and gas revenue reached 11.7 percent of GDP last year. Sberbank, the country's biggest bank, rose 3.7 percent to 102,604 rubles. UBS AG raised its price estimate for the shares 19 percent to $5,250, citing data from Russia's Central Bank on growth in loans and bank deposits. Shares of X5 Retail Group NV, Russia's biggest supermarket chain, also climbed today, adding 1.4 percent to $28.40 in London. The company said it intends to raise $1 billion through a secondary stock sale for expansion and a possible acquisition of the Carousel superstore chain. Chief Executive Officer Lev Khasis said March 29 that the company was considering selling between $1 billion and $2 billion in stock. ``We view this more limited amount as good news,'' wrote Odile Lange-Broussy, an analyst at Aton Capital in Moscow, in a research note today. Lnage-Broussy has a ``buy'' recommendation on X5 shares and a price estimate of $35.50. To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net Last Updated: April 13, 2007 11:42 EDT