Uralsib Investor Watch (20)
Russia’s Improved Investment Case is Obscured by Global Concerns
By Chris Weafer Russian equities (RTS) should be trading closer to our target of 1,950……the reason it is not is because investors continue to view the case for Russia as a derivative of global market recovery….that was a valid point in 2009 but it is no longer justified today. Still, the main driver of the market remains external and that creates uncertainty as to when the RTS will reach the target of 1,950. With prospects for another round of US QE increasing and with oil sticking above $80 p/bbl, the risks are much more on the upside. Stay fully invested. The banks are the best market theme.
Posted by Chris Weafer
on 15.10.2010 08:15.
Published in Uralsib Investor Watch
By Chris Weafer
Russian equities and the ruble are set for a better opening following gains across Asian markets. Investors remain more hopeful that this week’s critical economic reports will confirm that recovery remains on track in major economies. But there is still considerable underlying nervousness that will keep sentiment fragile for the next two weeks, i.e. until after the Wall Street banks publish their 3rd Qtr numbers next week.
Posted by Chris Weafer
on 04.10.2010 07:05.
Published in Uralsib Investor Watch
Asian equities have, this morning, extended last week’s rally as optimism continues to rise that the world is now on a more secure recovery path. Whether that optimism is valid or misplaced will be proven over the next three weeks. Only then will we know if markets will have a strong burst into the year-end or limp across the finishing line.
Posted by Chris Weafer
on 27.09.2010 08:19.
Published in Uralsib Investor Watch
By Chris Weafer
It is nothing new to say that the investment case for Russia is mainly predicated on global economic trends. That has been the case all year. But, two domestic items have recently become very important and raised at least the perception of higher investment risk in Russia. Thus justifying, for many investors, the very cheap discount that, on average, equities and the ruble are trading relative to EM peers. Those two events are the growth in inflation and the plan by Transneft to takeover Novorossiisk Seaport. If the former is not contained and the latter is not handled in a way that protects the rights of minority investors, then the perception of higher risk will be justified and damaging. Already, over the past five days the IOB Index of Russian GDRs fell 2.5% while the MECI EM Index gained 2.3%.
Posted by Editor
on 20.09.2010 09:09.
Published in Uralsib Investor Watch
By Chris Weafer
The better than expected August industrial output in China will help boost global market confidence on Monday morning. Output grew at 13.9% year on year while consensus was for an increase of 13.0%. That number will ease fears that government curbs on lending and speculative investment activity is slowing economic growth The better than expected report will also support the price of metals and oil at the start of the week as fears of reduced import demand will also ease.
Posted by Chris Weafer
on 13.09.2010 10:17.
Published in Uralsib Investor Watch
By Chris Weafer
“September, blow soft until the wheat’s in the loft”…. 16th century proverb particularly applicable in Russia today. The US capital markets will be closed Monday for the Labour Day holiday. Usually that means that most other markets experience a quiet trading day without the influence of the US. Investment sentiment is likely to be more positive at the start of this week than it was one week earlier. The better than expected manufacturing surveys in the US and China plus Friday’s positive payroll report helped most markets close strongly. There are very few economic reports with market significance scheduled for this week so, theoretically, we should again see a positive return for equities, commodities and for developing market currencies.
Posted by Chris Weafer
on 06.09.2010 07:13.
Published in Uralsib Investor Watch
By Chris Weafer
US Fed Chairman Bernanke’s upbeat assessment of growth prospects for the US economy was enough to lift market spirits on Friday. The gain in most markets on Friday afternoon was enough to almost reverse the early week losses that came on the back of another series of worse than expected economic updates. This week will be even more testing with two
Posted by Chris Weafer
on 29.08.2010 19:32.
Published in Uralsib Investor Watch
Tagged under
Monday is the international day for the remembrance of the slave trade and its abolition. But, while human slavery has been substantially reduced since President Lincoln’s proclamation in 1862, most global equity markets and developing economy currencies remain very firmly enslaved to the trend in the US economy and the direction of Wall Street. The domestic story, especially in economies like Russia that are so dependent on commodity exports, is only of secondary importance. If the recent deterioration in the US growth trend continues then equity markets elsewhere are more likely to suffer from further emaciation than to achieve emancipation.
Posted by Chris Weafer
on 23.08.2010 06:56.
Published in Uralsib Investor Watch
Tagged under
Stronger Earnings Trump Weaker Economics
A series of missed economic targets kept markets nervous and volatile last week. But, above that, the generally better than expected earnings reports from major corporations across Asia, Russia and in the EU and US, proved to be an even more important, and stabilizing, factor. It gives investors confidence about current valuations, which are low enough to reflect the expected slower pace of economic recovery. The VIX Volatility Index fell to 21.7 by the close on Friday from 23.5 the previous week and that is a positive indicator of market sentiment.
Posted by Chris Weafer
on 09.08.2010 08:43.
Published in Uralsib Investor Watch
Russia: Prisoner in a Gilded Cage
After recording very strong gains in July, developing market equities and currencies face a very testing start to the new month. As last week ended, confidence in a strong global economic rebound was again slipping and Sunday’s lower than expected PMI in China will only add to investor worries on Monday. Whether equities and currencies in developing markets can extend last month’s gains or see them reverse will depend on the strength of this week’s economic reports in the US and Europe. Where the dollar trades will also be highly significant for Russian investor sentiment.
Posted by Chris Weafer
on 02.08.2010 16:09.
Published in Uralsib Investor Watch
Tagged under