Ironic development: International investors interested in Russia more than before new sanctions


August 8 , 2017 – Fort Russ News – 

KtovKurse – translated by Inessa Sinchougova 

For the first time since the beginning of summer, international investors have invested more in the Russian stock market than taken from it, says the Emerging Portfolio Fund Research (EPFR).

It is reported that for the last week of July, the net inflow of client funds into funds focused on Russia amounted to about $2 million, whereas in the previous seven weeks investors have withdrawn almost $700 million from Russia.

Thus, last week was the first since June, when international investors invested more money in Russia than they took out.

Now the inflow of investments goes to most regional and country funds. According to the EPFR, over the past week, funds in developing markets attracted $2.2 billion, which is $800 million more than a week earlier.

Increasing demand for securities in developing countries contributed to the meeting of the Fed, during which it was decided to leave the key rate at the current level of 1-1.25%.

Investors reduced their sales of ruble assets against the backdrop of the rapid growth of oil prices and soft rhetoric of the US Federal Reserve, which strengthened the market’s belief that tightening of the policy in the US will go slower than the regulator expects.

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As for oil, in the last two weeks the value of the North Sea brand Brent has risen by almost 9%, to $ 52.5 per barrel.

According to experts, the cheerful growth of oil quotations, as well as the growth of the dollar to the level of 60 rubles, did not remain without investors’ attention, while sanctions, on the contrary, have already developed a certain immunity, and the influence of this factor has temporarily receded into the background.

Meanwhile, analysts are confident that the recovery in oil prices has already exhausted itself, and against the backdrop of the end of the dividend period in Russia, this could lead to a decrease in demand for ruble assets.

At the same time, it is noted that for the time being it is possible to talk only about a certain stabilization of moods around Russia, which was superimposed on a very successful week for the oil market.

In the absence of further growth in oil prices, there will also be no reason for the growth of ruble assets. According to experts, even now, given the end of the dividend season in the Russian market, there is a clear crisis of investment ideas.

In the incomplete month, which ended July 26, the amount of funds withdrawn from Russian funds amounted, according to the EPFR, to almost $ 300 million.

July was the fifth month in a row, when funds recorded a net outflow of investors’ funds, during which time almost $2 billion was withdrawn from them, and this outflow of foreign investment from Russia became the longest in the past three and a half years.

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