Bearish on Russia?

Confidence has fallen but investors still see opportunity

Russia has been under stress because of the situation in the Ukraine and because of the falling oil price – and clearly, as shown by the data above, this has affected the short-term outlook for growth.

But, taking a longer term view, we believe it’s possible to look beneath the headlines to uncover hidden value. In Russia, for example, on a corporate level, we’ve recently identified several opportunities where we believe corporate debt has been oversold and a re-pricing is overdue. One area of interest is companies whose assets or revenues are in dollars and who therefore benefit from a decline in the rouble.

For us, the failure of the market to drill down beneath the surface to recognise these opportunities is part of the attraction. By targeting unloved or out-of-favour areas we aim to capture a long-term structural premium. That’s one of the reasons Russia remains an exciting place to invest.

Robert Simpson – Insight, a BNY Mellon company

Russia has been under stress because of the situation in the Ukraine and because of the falling oil price – and clearly, as shown by the data above, this has affected the short-term outlook for growth. But, taking a longer term view, we believe it’s possible to look beneath the headlines to uncover hidden value. In Russia, for example, on … read more

  • Download
  • Print
0 comments | Join the conversation, comment now
The week that was…

In the week ending 24th July, what stole the financial headlines?

A week on from the downing of a Malaysian airliner over Eastern Ukraine, the blame-game was in full flow with the West quick to point the finger at Russia for its continued interference in Ukraine. Meanwhile, the West announced plans for a further raft of economic sanctions on Russia. Elsewhere, there was no let-up in Israel’s bombardment of Gaza and, as the death toll rose, John Kerry, US secretary of state, travelled to the region in an effort to broker a ceasefire between the two factions. In other news, there was a focus on hedge funds which, while currently the victims of low market volatility, are being tipped to shine as and when the US Federal Reserve chooses to increase interest rates.

Headline Hotlist & World/ Asset Returns Source: The BNY Mellon Investment Strategy and Solutions Group (“ISSG”) as at 25/07/14. ISSG is part of The Bank of New York Mellon.

A week on from the downing of a Malaysian airliner over Eastern Ukraine, the blame-game was in full flow with the West quick to point the finger at Russia for its continued interference in Ukraine. Meanwhile, the West announced plans for a further raft of economic sanctions on Russia. Elsewhere, there was no let-up in Israel’s bombardment of Gaza and, … read more

  • Download
  • Print
0 comments | Join the conversation, comment now
The week that was…

In the week ending 17th July, what stole the financial headlines?

The downing of the Malaysian airliner in Ukraine on Thursday was swiftly followed by renewed bouts of finger-pointing by the Ukrainian and Russian governments, each adamant the other was responsible for the tragedy. Russia’s influence on the separatist rebels occupying the area of Eastern Ukraine in which the plane came down was the subject of much rhetoric from Western leaders, with the prospect of further economic sanctions on Russia looking increasingly likely. Meanwhile, after US Federal Reserve (Fed) Chair Janet Yellen suggested the Fed was in no hurry to raise interest rates, Larry Fink, chief executive at Blackrock, urged the central bank to end its crisis-era policies. On the economic front, despite weakness in the US housing market (most notably in home building), employment numbers and manufacturing activity are painting an increasingly positive picture for the economy.

Headline Hotlist & World/ Asset Returns Source: The BNY Mellon Investment Strategy and Solutions Group (“ISSG”) as at 17/07/14. ISSG is part of The Bank of New York Mellon.

The downing of the Malaysian airliner in Ukraine on Thursday was swiftly followed by renewed bouts of finger-pointing by the Ukrainian and Russian governments, each adamant the other was responsible for the tragedy. Russia’s influence on the separatist rebels occupying the area of Eastern Ukraine in which the plane came down was the subject of much rhetoric from Western leaders, … read more

  • Download
  • Print
0 comments | Join the conversation, comment now
The week that was…

In the week ending 10th July, what stole the financial headlines?

Minutes from the Federal Open Market Committee’s June meeting showed the US Federal Reserve hasn’t altered its expectation of an interest rate hike in the second half of 2015, while tapering is in line to be completed this October. Meanwhile, questions continue to be asked over the veracity of the US economy recovery. US employment numbers continue to impress while lending to businesses is reaching record highs but doubters remain plentiful in number. In Europe, all has gone quiet on the Eastern front as President Vladimir Putin mulls his next move with regards to Ukraine. This follows a speech two weeks ago in which he accused the US of Cold War tactics.

 

Headline Hotlist & World/ Asset Returns Source: The BNY Mellon Investment Strategy and Solutions Group (“ISSG”) as at 10/07/14. ISSG is part of The Bank of New York Mellon.

Minutes from the Federal Open Market Committee’s June meeting showed the US Federal Reserve hasn’t altered its expectation of an interest rate hike in the second half of 2015, while tapering is in line to be completed this October. Meanwhile, questions continue to be asked over the veracity of the US economy recovery. US employment numbers continue to impress while … read more

  • Download
  • Print
0 comments | Join the conversation, comment now
The week that was…

In the week ending 26th June, what stole the financial headlines

News headlines were dominated by continued unrest in the Middle East and stalemate in the Russia/Ukraine crisis. US Secretary of State John Kerry visited Saudi Arabia to discuss the ongoing crises in Iraq and Syria – the Obama administration has asked Congress for US$500m to train and equip members of Syria’s opposition. On the topic of Iraq, the likely effect of the country’s turmoil on the oil price is being questioned by many. Although the violence in Iraq has thus far had a limited impact on global oil markets, many commentators believe emerging markets will bear the brunt of any negative consequences. Elsewhere, the Russian government is working on measures to replace imported industrial goods with domestically manufactured ones in an effort to dampen the effect on its economy from its stand-off with Ukraine.

 

Headline Hotlist & World/ Asset Returns Source: The BNY Mellon Investment Strategy and Solutions Group (“ISSG”) as at 27/06/14. ISSG is part of The Bank of New York Mellon.

News headlines were dominated by continued unrest in the Middle East and stalemate in the Russia/Ukraine crisis. US Secretary of State John Kerry visited Saudi Arabia to discuss the ongoing crises in Iraq and Syria – the Obama administration has asked Congress for US$500m to train and equip members of Syria’s opposition. On the topic of Iraq, the likely effect … read more

  • Download
  • Print
0 comments | Join the conversation, comment now