Russia

Countries/Indexes/Funds/Strategy

March  2017

2017 Russia in Spotlight and

Which Benchmark Is Good? – RTS. 

• Russia has been a problem child of global emerging markets ever since 2008 crisis. Investor perception worsened following 2011 political unrest, 2014 geo political problems and the oil price collapse.
•  Nevertheless in 2016 Russia was the second best performing market globally - following Brazil up 70%. Can it repeat the success of 2016?
• International investors are increasingly exposed to Russia via ETFs yet most of the ETF money is tracking either MSCI Russia universe or a RSX Russia universe. While probably the only proper benchmark which is most widely associated with Russia is RTS index, but there are no large ETFs linked to RTS universe.
• Having looked at Russian macro, we think that recovery is unavoidable and will be driven either by restocking, an oil price bounce or major structural shifts i.e. productivity increases or fall of inflation and Reagan style credit expansion.

Table of Contents

Russia Drivers

Trump

Sanctions

Election

Shift to Fundamentalism

Valuation

Ukraine

IPOs

Ulyukaev impact

Kudrin

CBR

Japan

Top Best Worst Sectors

Comparison of RTS/RSX Russia and MSCI Russia

Market Cap coverage and concentration

Sector Coverage

MSCI Methodology

Foreign names in Benchmarks

10-40 Issues

RTS Methodology

Valuation

Ownership Study

Correlations

Russia ETFs

IOSCO Principles

Russia in 2017 Macro

Russia on the path to recovery

Oil price impact and sanctions impact.

Policy response

Fall in Productivity

Sectors with sustained productivity levels

Fall in inventories

Consumer Credit

Real rates

Conclusion

Download the file in PDF

2017 Russia in Spotlight and

Which Benchmark Is Good? – RTS .