Russia Plays In Focus As Ruble Bulks Up
The Russian ruble is on a charge of late, and that could lead to interest rate cuts and a further rebound of the country’s largely commodity-tied equity sector.
As 2009 wound to a close, various analysts and financial institutions chimed in with their top trading ideas for the New Year. Number two on Goldman Sachs’ list was long Russian equities, citing expectations for “continued easing in monetary policy,” and an economic growth profile that’s “among the most robust in the region.” The ruble is now at 14-month highs versus a euro-dollar basket, according to Forbes, and that could help bring Goldman’s forecast to fruition if the Russian central bank steps in.
As a whole, the U.S.-listed equities that make up the Russia Stocks and ADRs Index have outperformed the S&P 500 by 3% over the last month – a period in which Wimm Bill Dann Foods (WBD) is the group’s only loser, and other components have shot up by double-digits.
Television network company CTC Media (CTCM) is the Index’s top performer over the last month, up by 28%. Telecomm player Vimpel-Communications (VIP) and cellular network provider Mobile Telesystems (MBT) have also shot up by over 10% for the period.
On the commodity front, steel giant Mechel (MTL) has led the Russian rally with a 20% one-month run. Oil player Surgutneftegaz (OTC: SGTPY) is also up big while its peers Gazprom (OTC: OGZPY) and Lukoil (OTC: LUKOY) hang among laggards for the period, up less than 3%.
It will be interesting to see whether Russian equities can maintain their recent momentum, and if Goldman’s 2010 forecast will prove to be on target. At the end of 2009, ten Pro investors counted the Market Vectors Russia ETF (RSX) among their top-15 U.S.-listed equity holdings, placing it in the top-ten most popular components of the Single Country Emerging Market ETFs Index among hedge funds, mutual funds, and advisors.
As of this writing, the Russia Stocks and ADRs Index is one of the top-five tickerspy international Indexes over the last month, up by 10.5%.
Investors can track the Russia Stocks and ADRs Index for performance trends and a suite of other metrics at tickerspy.com.
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