Citi Analysts Like Russian Market
Citi issued a report yesterday entitled “Global Strategy on the Stock Market of Developing Countries.” According to the bank's experts, investors should invest in countries that export raw materials, and Russia is attractive because its market is undervalues and maximally isolated from the world financial crisis. They predict that the market growth seen in developing countries over the last seven years will be maintained this year, in spite of a complex situation in the first half.
The report names Korea, Hong Kong, Taiwan, Malaysia, Mexico, Brazil, Russia, Turkey, the Middle East and North Africa as attractive countries for investment. Political uncertainty has been reduced in Russia, so investments in the raw materials market there will be profitable as long as prices continue to rise. Observers agree, noting that Russia has the lowest price-earnings ration among the BRIC countries. That ration is 10 in Russia, 12 in Brazil, 15.5 in China and 17.5 in India.
The large number of new issuers on the Russian market last year curbed market growth last year, exerting a negative effect on companies' liquidity. The small number of them this year will encourage the market. Citi researcher Andrew Howell commented for Kommersant that the macroeconomic bubble created by price growth on the commodities market in Russia was one of the factors that protected the Russian market from the world financial crisis. That is in contrast to the countries Southeast Europe, such as Hungary, Romania and Bulgaria, where a disbalance of current operations, inflation and interest rates threaten to slow the economy.
www.kommersant.com
All the Article in Russian as of Mar. 28, 2008
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