By James Beadle from Market-Melange
Russia’s economic situation has improved steadily in 2H10, while it’s equity market has held its ground, and debt has performed well given the increase in sovereign worries globally. Yet, growth and financial market performance have fallen short of expectations, despite sharp disinflation. Looking forward, weaker than expected growth may be exposed to the risk of a global economic or financial shock. Investors preparing for a sharp double dip, continued deflationary pressure or an uncontrolled sovereign default will want to avoid Russia as they avoid other risk assets. But for those expecting a less catastrophic second half, Russia looks increasingly attractive. Accelerating growth and reform momentum are likely to bring strong, if volatile returns over the remainder of the year.
Download the full report here: Russia 2H10
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James, you are very right about both strong and volatile returns. Although very few will dare to buy Russian stocks when RTS index gets down to 1000 in July. This is despite accelerating growth and reform momentum.