Salient to Investors:

  • Alexander Antipov at Veles Capital said investors are cautiously optimistic as there are talks and there have been no new sanctions on Russia. Antipov said Russian equities are very cheap, and long-term investors will make serious profits when the Ukraine crisis is solved and things return to normal.
  • The Micex Index is at 5.2x projected earnings, the cheapest among emerging markets and at a 57% discount to the MSCI Emerging Markets Index multiple.
  • Igor Nuzhdin at OAO Promsvyaz Bank said investors do not expect a quick solution to the crisis, but the market sees no new sanctions against Russia as long as talks continue. Nuzhdin said ex-geopolitical risk, most of Russia’s biggest companies are fundamentally attractive long-term.
  • Cameron Brandt at EPFR Global said Russia-dedicated funds this month through August attracted the highest monthly inflow since March, and the performance gap between Russian equities and emerging markets in general is inviting, especially if events in Ukraine resolve themselves without getting close to the worst-case scenarios.
  • Alexey Tretyakov at Aricapital said investors take no breakthrough but no major escalation in the Ukraine crisis as good news.

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