Aquadruple dose of good news has spurred a 60 percent price jump in the stock of Sberbank, Russia's largest bank, in recent days.

Analysts said the announcement of better-than-expected earnings results and the removal of the 5 percent restriction on foreign ownership were the key events sparking a rise in the banking giant's stock to near $50 a share from $31.90 a share June 29 on the Russian Trading System.

Also boosting short-term prospects for the stock, according to analysts, were statements by Sberbank's president calling the shares undervalued, along with his comments on the potential of raising of hundreds of millions of dollars in foreign investment in the near future.

However, despite the recent spurt, some analysts remained cautious about the bank's long-term prospects.

Sberbank is Russia's oldest financial institution and once enjoyed a monopoly on retail deposits in Russia. It was privatized in 1991, but the Central Bank still holds the majority stake – 58 percent – and effectively determines its strategy.

Following release of Sberbank's better-than-expected financials – which showed net earnings of about $334 million for 1999 – Russian brokerage United Financial Group (UFG) raised its recommendation to "buy" from "hold." It said in its research note that the results indicate "that the bank has overcome the most painful consequences of the August 1998 crisis."

It also cited "new progress in the liberalization of the market for Sberbank stock," referring to the decision to abolish the 5 percent limit on foreign holdings in the bank. The bank noted, however, that confusion still remains about the details of the new regulations concerning foreign ownership.

While upgrading its recommendation, however, UFG did add a note of caution. "Despite our bullish short-term view of the stock, we note that concerns related to high operating costs and the significant influence of the state on the bank's strategy will constrain its growth in the long run," the research note said.

Other analysts also expressed concerns about long-term prospects.

"This [lifting of the foreign-ownership cap] is an encouraging development as foreign investors are the biggest investors and important for attracting future investments," said Vladimir Merkushev, a CentreInvest Securities analyst. "However, most people are still pessimistic about the long-term outlook as the bank is still considered a Soviet-style monolith."

Sberbank President Andrei Kazmin also influenced the stock's performance in the past week, saying that the shares were undervalued by "10 times." He also said that foreign investors are showing increasing interest in Sberbank and that raising "between $500 million and $1 billion in foreign equity investment over the next five years" is possible.

Sergei Prudnik, economics analyst at Troika Dialog, agreed that Sberbank stock is undervalued, but he was not as exuberant as Kazmin. "Shares are certainly undervalued, but by much less than 10 times," he said.