“The Russian financial system is at its strongest in years,” says Anna Hirtenstein in The Wall Road Journal. A “gusher of fuel and oil revenues” has helped make the rouble one of many few rising market currencies to carry its personal towards the greenback over the previous yr. Russia solely wants oil costs of $40 a barrel to interrupt even; this week Brent crude was buying and selling at $83 a barrel. Hovering European fuel costs assist fill the coffers. But whereas Western oil majors rally, shares in state-controlled Gazprom are being left behind. “Geopolitics, not economics, are driving Russian markets.”
Definitely, intrepid bargain-hunters will discover a lot to love in Russia, says Danil Kolyako on In search of Alpha. The oil market seems to be more likely to stay tight in 2022 and Russian shares boast among the most eye-catching dividend yields on this planet. “The vast majority of Russian dividend-paying shares are going to ship dividend yields ranging primarily from 9% to fifteen% in 2021 and 2022.” That partly displays robust commodity costs, but in addition the truth that with native rates of interest at 8.5% – the results of “hardcore financial coverage” – dividends have to sustain.
Russian markets look “terribly low cost”, agrees Paul McNamara of asset supervisor GAM. “Ukraine is the difficulty.” Regardless of being “the toast of rising markets” for a lot of 2021, shares have fallen 11% since October as Russian troops mass on its neighbour’s border and traders turn out to be cautious, say Alexander Sazonov and Anna Andrianova on Bloomberg. If Russia have been to invade Ukraine, the ensuing sanctions would make it “inconceivable to know what you’ll be able to and might’t do”, rendering the nation “uninvestable”, says Elena Loven of Swedbank Robur Fonder, a Swedish asset supervisor that at present has investments in Russia. “If it invades Ukraine, Russia would disappear as an asset class.”
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