{{{?:0}}} By Chris Weafer, Chief Strategist, Ovanes Oganisyan, Strategist, and Iskander Abdullaev, Quant Analyst, Sberbank Investment Research Investors added another $5.8 bln to EM retail funds in the week ended Wednesday to bring the total invested YTD to $16.6 bln. Russia funds reported a net outflow of $64 mln for the past week, which brings… Continue Reading
Category Archives: Views
SBERBANK COMMENT FROM CHRIS WEAFER: Russia in context – an expected journey
By Chris Weafer, Chief Strategist, Sberbank Investment Research. It does not do to leave a live dragon out of your calculations, if you live near him. J.R.R. Tolkien, The Hobbit US budget worries have balanced out macro optimism. Markets have been in something of a zero-sum game in recent weeks as the lingering concern over… Continue Reading
SBERBANK COMMENT: Fixed income – 2013 preview: nothing is (im)possible
By Alexander Kudrin, Head of Fixed Income Research, Managing Director, Sberbank Investment Reseach. The performance of most bonds at end 2012 promises to be impressive. Liquidity njections by leading central banks, the main tool against the financial crisis, have sent interest rates in developed markets down to almost zero. Moreover, the key guide for such… Continue Reading
SBERBANK COMMENT: Muddling through with modernization
By Evgeny Gavrilenkov, Chief Economist, Managing Director, Sberbank CIB. Economic growth slows. GDP rose 2.9% y_o_y in 3Q12. Formally, GDP growth slowed from 4.5% over 1H12, but this was due mainly to a 5.6% drop in agricultural output in 3Q12, versus an increase of 29.7% in 3Q11. Although growth decelerated in other sectors, such as… Continue Reading
Ukraine: First snowfall already turning to slush
By Conal Campbell of www.Growth-Communications.com. The week started with twin signs of optimism with the government of Mykola Azarov resigning (with the hope being that he may be replaced as PM by National Bank governor and relative liberal Sergiy Arbuzov) and announcement of an official IMF visit aiming to restart cooperation to help Ukraine meet its… Continue Reading
GOLDMAN SACHS COMMENT: Our weird but beautiful world
By Jim O’Neill, Chairman, Goldman Sachs Asset Management. My week kicked off with a tough Monday start following the Rolling Stones concert Sunday night, but what a boost it gave me. Keith, Mick and the boys rocked on for two and a half hours. It really is quite an inspiration that such serious and serial… Continue Reading
Ukraine: Downgraded growth, downgraded ambitions
By Conal Campbell of www.Growth-Communications.com. Ukraine’s government has approved its macroeconomic forecast for 2013, projecting GDP growth of 3.4% (vs. 0% expected this year) in line with the latest IMF forecast but exceeding Kiev based Dragon Capital’s projection of 2.5%. With Ukraine’s GDP growth expected to under-perform most regional peers on the back of a deteriorating investment… Continue Reading
RenCap: Africa a great place to invest
By Andrei Skvarsky. A Renaissance Capital team of analysts have brought out a book making a passionate case for investment in Africa, crediting the continent’s economy with developing by leaps and bounds. “The economies of most African nations have transformed beyond recognition, and are set to surpass the growth seen in Asia and India over… Continue Reading
GOLDMAN SACHS COMMENT: Washington and Beijing
By Jim O’Neill, Chairman, Goldman Sachs Asset Management. Washington and Beijing. This week has been an important news week, at least for the media, for political developments in the US and China. I would question whether anything has materially changed as a result of the US election and the Chinese leadership handover. The stock markets… Continue Reading
SBERBANK CIB COMMENT: Chief economist's view – setting elusive targets
By Evgeny Gavrilenkov, Managing Director, Chief Economist, Sberbank CIB Although inflation remains elevated in Russia, the authorities do not appear to be overly concerned. The Central Bank increased interest rates in September by 25 bps and has repeatedly promised to switch to targeting inflation at some point, but in general the government seems to be… Continue Reading
Ex-Kremlin think tank predicts political turmoil in Russia
By Andrei Skvarsky. A think tank that used to be a strategic economic planning centre for the Kremlin argues that “growing discontent” with President Vladimir Putin and his government is likely to precipitate mounting nationwide public unrest. The forecast comes in a report released last week by the Centre for Strategic Research (CSR), a Moscow-based… Continue Reading
European Parliament urges visa ban, asset freeze for Magnitsky’s alleged killers
By Andrei Skvarsky. The European Parliament on Tuesday passed a non-binding resolution calling for tough European Union-wide sanctions against Russian officials blamed for the allegedly unlawful arrest of Sergei Magnitsky, a lawyer for British investment fund Hermitage Capital, and his death in custody in 2009. The resolution recommends that the EU Council, effectively the Union’s top… Continue Reading
CHRIS WEAFER COMMENT: Russia in context – as unwelcome as the person from Porlock
By Chris Weafer, Chief Strategist, Sberbank Investment Research. Boarding this vessel is an act of war. Ergo we surrender. Rimmer (Red Dwarf) Nervous wait for Wall Street is most likely. Equities and the ruble have opened moderately weaker today after US markets closed near the session low on Friday. This came about as investors became… Continue Reading
Geneva’s Lombard Odier says eurozone breakup inevitable
By Andrei Skvarsky. Geneva-based Lombard Odier, one of Europe’s largest private banking firms, predicts that the euro will survive as a currency, albeit significantly restructured, but that the eurozone will inevitably part company with some of its constituent countries. The currency needs restructuring if it is to survive, according to Paul Marson, a top Lombard… Continue Reading
Russia and commodity prices in the new IMF report
By Dieter Wermuth, Chief Economist, Wermuth Asset Management According to the International Monetary Fund, Russia’s real GDP will expand by 3.7 % y/y in 2012, and by 3.8% next year. Growth continues to be revised down in response to the slowdown of world output. It seems that the new medium term growth rate is in… Continue Reading
Bank of Georgia’s investment case marred by political uncertainty – RenCap
By Andrei Skvarsky. Renaissance Capital analysts warn that investing in Bank of Georgia, until now one of the best-performing banks within the boundaries of the former Soviet Union, poses some risks today due to post-election political uncertainty in its home country. Georgian Dream, a coalition that beat the ruling United National Movement (UNM) in Georgia’s parliamentary… Continue Reading
GOLDMAN SACHS COMMENT – Russia: The only G20 economy that needs to slow down
By Clemens Grafe, Chief Economist, Goldman Sachs Russia. (Excerpt) Russia’s economy continues to be out of synch with much of the rest of the world: GDP growth has held up at an above-trend pace despite a slowing global economy. That said, we estimate that the output gap has now closed and that the economy will… Continue Reading
WERMUTH COMMENT: Markets are far from convinced that the Brussels agreement will work for the euro
By Dieter Wermuth, Chief Economist, Wermuth Asset Management. Other than I had expected, the June 29 agreements about the euro area banking union had impressed markets for only a short while. I think, though, that we have been witness to an irreversible quantum leap towards a stable institutional set-up for the common currency. The dangerous… Continue Reading
GOLDMAN SACHS COMMENT: Markets and Moods
By Jim O’Neill, Chairman, Goldman Sachs Asset Management. Markets and Moods. So, here’s the situation. The mood is grim. A lot of economic data has turned grimmer, which makes many people so bearish about many things, markets included. Much of the “mood” centres on a sense of hopelessness about Europe, with the risk on/risk off… Continue Reading
Ex-adviser to Russian government: “zero prospect” of Moscow being international financial centre
By Andrei Skvarsky. Tim Reucroft, a London-based consultant who has advised Russia and other emerging markets on capital market infrastructures, has said the Kremlin’s plan to turn Moscow into an international financial centre has “zero prospect” of materialising. An IFC is all about cross-border flows, and so the Russians are wrong to be focusing on… Continue Reading
RenCap gains quicker access to Micex-RTS with GATElab module
By Andrei Skvarsky. Renaissance Capital has obtained much faster access to the Micex-RTS stock exchange this month by launching a software module developed by electronic trading solutions provider GATElab. By using GATE’s high frequency software trading module, a RenCap client would take a maximum of 130 microseconds to gain one way nic-to-nic access to Micex-RTS,… Continue Reading
RenCap says ruble’s decline no reason for anxiety
By Andrei Skvarsky. Renaissance Capital argues that this month’s 7.2% decline of the Russian ruble versus the dollar is not much to worry about. Various currencies have been going down against the dollar, and the ruble has been doing better than, for example, the Polish zloty, the Hungarian forint or the Czech koruna, which have… Continue Reading
AGC makes biggest-ever Middle East investment in Russia
By Andrei Skvarsky. AGC Equity Partners has acquired $175m interest in a major Russian generating company in what is seen as the largest-ever Middle East investment in Russia. The London-headquartered firm with a team in the Middle East is part of an international consortium that has bought a 26.43% blocking stake in Italian-controlled Enel OGK-5… Continue Reading
WERMUTH COMMENT: Putin’s challenge: falling oil prices
By Dieter Wermuth, Chief Economist, Wermuth Asset Management. As Putin has assumed office once again, dark clouds in the form of plunging oil prices and a recession in Western Europe are hanging over him. His third term as president is unlikely to benefit from a benign external environment. Investors are reminded that Russia has a… Continue Reading
GOLDMAN SACHS COMMENT: Apple, China and the Growth Markets
By Jim O’Neill, Chairman, Goldman Sachs Asset Management. This past week, I spent 3 days in the US, in New York and Chicago. The main purpose of my NY visit was to host our 2nd GSAM Growth Markets Summit, which was quite an event, with many interesting speakers, panels and a great list of clients.… Continue Reading
Will Putin 2.0 mean a return to the prosperity of the 2000s?
By Ian Pryde, founder and CEO of Eurasia Strategy & Communications in Moscow. Vladimir Putin is unlikely to deliver full-blown reform, the only way to dampen the impact of the predicted drop in oil prices on an economy heavily dependent on oil exports, Ian Pryde argues in his article, first published on the Russia Beyond… Continue Reading
GOLDMAN SACHS COMMENT: A Twist with Messrs Posen and Shirakawa
By Jim O’Neill, Goldman Sachs Asset Management. This week, I was severely tempted to pursue the analogy of comparing 2012 with 2011 and 2010, especially as it relates to most peoples persistent belief that we live in a US-dominated world. But these two gentlemen stopped me. Thanks to Adam and Masaaki . Mind you, if… Continue Reading
Investors should avoid Russia’s oil and gas sector – Wermuth
By Andrei Skvarsky. Russia’s oil and gas sector would be the wrong choice for an investor these days, according to Dieter Wermuth, chief economist at Wermuth Asset Management, a Russia-focused German fund manager. With global economic growth slowing down significantly, a world oil price that has quintupled since 2003 makes no sense economically and mainly… Continue Reading
GOLDMAN COMMENT: Europe Needs Growth, not More Austerity
Jim O’Neill, Chairman, Goldman Sachs Asset Management Late Friday, the S&P finally followed through with their early December 2011 threat and downgraded a number of European countries’ credit rating, including Austria and France, who lost their AAA status. This threat had been hanging over the markets ever since the last EU Summit and, at least… Continue Reading