Emerging market laggard tipped to catch up

Political uncertainty has kept a lid on Russian stocks of late, but that could soon change. We look at why Russia's insulation from the US could make it a good refuge for your money.

Russia's benchmark RTS index took a breather last year, trailing other major emerging markets with a 19% gain. Political uncertainty towards the end of the year kept a lid on stocks. Now, though, with president Vladimir Putin backing his close ally, Dmitry Medvedev, to succeed him as president in March and receiving Medvedev's endorsement as his first choice for prime minister, this issue has been resolved.

Putin has caused jitters over property rights during the past few years by hounding oil giant Yukos into bankruptcy and increasing state control over the energy sector. However, he is credited with stabilising the economy after the chaos of the Yeltsin years. Investors have now received a signal that "the regime that delivered Russia from economic chaos" and presided over "sustained growth and booming foreign investment isn't going anywhere", says S. Adam Cardais on Transitions Online.

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