According to Bloomberg the Russian market has replaced China as the most attractive BRICS country for investors in 2015.
A crude oil rebound, currency rising, and a Ukrainian ceasefire are behind the potential turnaround of Russian assets. Bloomberg says that currently Russian shares are undervalued by up to half compared with other BRICS countries and that they can be more profitable if the political risks continue to reduce.
London-based GAM U.K. Ltd. currently overseas USD$120 billion worth of assets and Investment Manager Tim Love told Bloomberg Russia is popular right now.
“Our models are telling us to buy Russia. There is a very strong turnaround potential. It’s an increasingly difficult call to get right because of the politics. I’d be happy to pull the trigger in the next two to three months,” Love said.
Bloomberg says in nominal terms, due to Russia’s Mixec Index (leading Russian Stock Exchange) progress of 17 percent in 2015 and a record drop in Russian volatility teamed with an increase in Chinese price swings, left returns superior to Moscow by a factor of 1 to China’s 0.6. This is also the best gain in the BRICS sphere.
In April Bloomberg also called the Russian Ruble the world’s best performing currency of 2015 at it’s peak trading about 49 to the US dollar.
This is in big contrast to December 2014 when Russian stocks lost almost 9 percent and the ruble hit a record low, making the central bank raise annual interest rates to 17 percent – the highest in more than 10 years.
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