Take it! Western investors love Russian stocks

© RIA Novosti / Vladimir Astapkovich in foobarcontroller in the office of the Moscow exchangeTake it! Western investors love Russian stocks© RIA Novosti / Vladimir Astapkovich the image Bank

While on the us stock market sell-off, foreign investment funds increase the share of Russian securities in their portfolios. Why is there such a stir and how long it will last — in the material RIA Novosti.

Russian and Western stock markets are again in opposition. Only if the earlier overseas markets grew, and the domestic fell, but now the situation is the opposite.

This week the Ministry of Finance after a long break was able to place the entire volume of the OFZ, and the demand is three times oversubscribed.

In the stock market, the situation is even more interesting. In the portfolios of most major Western funds specializing in emerging markets, the share of Russian stocks hit a record high.

Fund Lazard Emerging Markets invested in securities of domestic companies almost ten percent of the funds (more than four per cent of the shares). Another well-known on the world market Fund, Templeton Emerging Markets has brought the share of Russian securities in its portfolio to nine percent. Templeton prefers the «LUKOIL»: the shares of the company falls to 4.2% of the Fund’s assets — more than, for example, Unilever (3.6 percent).

Deutsche Emerging Markets Equity Fund (DWS) in Russian shares — seven per cent of the investment (including about the percentage invested in «Rosneft» and «LUKOIL», 0,6% — in «Yandex», 0,5% — at «Gazprom»).

The Fund emerging markets Oppenheimer (ODMAX) Russia occupies 6.3% of assets, trailing only China, India and South Korea, but significantly surpassing Taiwan, Mexico, Brazil, South Africa, UAE, Indonesia and other countries. Favorite Fund Oppenheimer — NOVATEK, 3.3% of assets.

However, the record for this indicator, it should be recognized Singapore AIA Emerging markets equity fund — 11%.

Marvelous dividends

Prices for Russian shares fell sharply in early April, after Washington imposed sanctions against the largest Russian companies and their owners. The fall did not last long, and in the middle of the month when the market groped the bottom of the most forward-thinking investors have switched to buying.

This pushed not just the fact that Russian shares have become the cheapest in emerging markets relative to corporate profits, the market decline had at the beginning of the period payment of dividends.

Russian companies are now considered world record holders for the dividend yield: average of 6.7%. Moreover, a reliable Russian company «Aeroflot», «Norilsk Nickel», NLMK, Severstal, MTS — ensure profitability in the nine, ten and even more per cent. For comparison, the world average figure of 2.6%.

In aggregate, the domestic company in the next couple of months will pay about 1.9 trillion rubles, or about $ 30 billion of dividends. Of these, the minority shareholders will get about 500 billion rubles, and a considerable part of this sum again will be used to purchase shares.

So by the fall of the Russian stock market promises to win back the April failure, and securities of domestic companies of good growth potential in the short term.

Without much risk

Additional optimism to investors inspire Russian macroeconomic trends — a budget surplus, industrial production growth, low debt burden on the budgets of most Russian companies. In addition, the oil in the world markets becoming more expensive and the ruble strengthened at the hands of Russian exporters.

«A stronger dollar increases the credit risks for developing countries, while Russia is among the least vulnerable to tighter external financial conditions of the States,» said last week the international ratings Agency Moody’s.

Moody’s analysts note that continued from mid-April to the strengthening of the dollar led to a sharp decline in foreign exchange reserves in a number of developing countries and increased credit risk for those with large external financing needs. However, Russia is outside the zone of risk «because of their low dependence on external capital inflows».

With regard to the extension of us sanctions in April of this year, 70% of Russian companies simply do not feel. These are the results of a survey conducted by the Bank of Russia.

«The direct effect of new sanctions on foreign flows to Russia has been limited — says the Central Bank. Due to the fact that the share of cross-border commercial and financial transactions, which may directly impact the sanctions are small in relation to the indicators of Russia’s balance of payments and GDP. The situation on the financial markets will remain stable, and the risks of adverse developments are assessed as low».