Russia: More than Just an Oil Producer

Think the Russian stock market is just energy equities? Think again. The fall in the oil price has led to sector diversification and the economy and companies are making gains

Karen Kwok 13 July, 2017 | 5:29PM

This article is part of the Morningstar's Guide to Emerging Market Investing. Click here to find out just what an emerging market is and which regions hold the potential to boost your investment portfolio.

Russia is well known as an oil producer. Oil and gas represented 40% of Russia’s total revenues at state level in the first three months of 2017, according to Ministry of Finance of the Russian Federation. So, when the oil price fell from $100 per barrel in June 2014 to $29 in January 2016, Russia equities fell from favour with investors.

However, investors would be wrong to write off Russia as simply an energy market. Looking at the MICEX index, the 50 most liquid stocks on the Moscow Exchange, presents a different story. The index rose 30% from 1,357 in April 2014 to 1,785 in January 2016, during which the oil price had tumbled. In January 2017, it had risen to a record high of 2,266.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Yandex NV Shs Class-A-41.00 USD1.91

About Author

Karen Kwok

Karen Kwok  is a Reporter for Morningstar.co.uk

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