Sunday, April 20, 2014

It's Time to Buy Russia

Tensions between Russia and the West may be on the rise following Moscow's annexation of Crimea, but some money managers say it's a good time to jump into the Russian market.

"Russia's stock market right now is one of the cheapest in the world, and probably one of the most hated," investment guru Jim Rogers, chairman of Rogers Holdings, said in Singapore Sunday, reports Reuters.

The ruble is down nearly nine percent on the year, and investors have pulled out about $4.4 billion from stocks and $4.1 billion from bonds between September 2013 and the middle of March, according to the latest data from EPFR Global.

"This is the time to buy Russia," said Rogers, adding that those banking on Russia should have a long-term strategy.

After Russia annexed Crimea, The U.S. and the European Union imposed sanctions that have already shown signs of hurting the Russian economy.

The country's reserve assets declined to $493.3 billion in February from $509.6 billion in December, according to data from the International Monetary Fund.

Rogers said he bought Russians stocks just last week and that if the EU and the United States impose more sanctions against the country and the market drops further, there would be even more buying opportunities there.

Rogers favors non-energy companies, although 58 percent of the RTS Index of 51 leading Russian companies is weighted towards energy and 13 percent towards basic materials.

Rogers is not alone in his thinking. "We believe that Russian equities are at levels which make them a compelling buy, and that patience will be rewarded," FMG chief investment officer Joe Portelli told Reuters.

"Russian stock prices could triple and they would still be at a valuation discount," agreed Chris Darbyshire, chief investment officer at Seven Investment Management.

- Source, Benefits Pro: