Russia Offers Attractive Valuations

The Russian stock market has barely moved over the past two years, despite a rebound in the oil price. Fund managers maintain the country is fundamentally cheap

David Brenchley 19 December, 2018 | 8:38AM
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St Petersburg, Russia, Russian stocks, Russian equities, Fidelity, Eastern Europe

The Russian stock market and wider economy are inextricably linked to the oil price. Almost two-thirds of stocks in the MSCI Russia index are in the energy sector, meaning when oil weakens, so too do Russia stocks, and vice versa.

During the oil price crash in 2014-2016, Russian equities understandably went through a difficult period. From the start of 2014 through to the end of 2015, the price paid for a barrel of Brent crude oil slumped by two-thirds. In turn, the Morningstar Russia index, in US dollar terms, halved.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Barings Emerging EMEA Opportunities Ord788.31 GBP-1.95Rating
Fidelity Em Mkts W-Acc-GBP2.33 GBP0.22Rating
Pictet-Russian Equities I GBP98.67 GBP1.25Rating
PJSC Lukoil7,191.00 RUB0.00
Sberbank of Russia PJSC364.83 RUB0.00

About Author

David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk