“The Russian economy is at its strongest in years,” says Anna Hirtenstein in The Wall Street Journal. A “gusher of gas and oil revenues” has helped make the rouble one of the few emerging market currencies to hold its own against the dollar over the past year. Russia only needs oil prices of $40 a barrel to break even; this week Brent crude was trading at $83 a barrel. Soaring European gas prices help fill the coffers. Yet while Western oil majors rally, shares in state-controlled Gazprom are being left behind. “Geopolitics, not economics, are driving Russian markets.”
Certainly, intrepid bargain-hunters will find much to like in Russia, says Danil Kolyako on Seeking Alpha. The oil market looks likely to remain tight in 2022 and Russian stocks boast some of the most eye-catching dividend yields in the world. “The majority of Russian dividend-paying stocks are going to deliver dividend yields ranging mainly from 9% to 15% in 2021 and 2022.” That partly reflects strong commodity prices, but also the fact that with local interest rates at 8.5% – the result of “hardcore monetary policy” – dividends need to keep up.
Russian markets look “extraordinarily cheap”, agrees Paul McNamara of asset manager GAM. “Ukraine is the issue.” Despite being “the toast of emerging markets” for much of 2021, stocks have fallen 11% since October as Russian troops mass on its neighbour’s border and investors become wary, say Alexander Sazonov and Anna Andrianova on Bloomberg. If Russia were to invade Ukraine, the resulting sanctions would make it “impossible to know what you can and can’t do”, rendering the country “uninvestable”, says Elena Loven of Swedbank Robur Fonder, a Swedish asset manager that currently has investments in Russia. “If it invades Ukraine, Russia would disappear as an asset class.”
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Landlords ordered to make rental properties more energy efficient by 2030The government has said rental properties must have a minimum EPC rating of C by 2030. We explain how much it will cost landlords to upgrade their buy-to-let portfolio
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?
Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
-
Trump's tariffs and a shrinking market for alcohol deal double blow to DiageoDonald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
-
Three stocks in recruitment companies with promising recovery playsRecruitment agency Robert Walters and its peers are struggling, but now's the time to buy, says Rupert Hargreaves
-
Four UK data companies to buy nowCompanies that create, harness or turn data into a valuable offering could be sitting on a hugely profitable gold mine. Rupert Hargreaves picks four of the best UK data companies to buy now.
-
Are European stocks too cheap to ignore?European stocks have enjoyed a surprisingly strong start to the year, with investors piling in despite the many problems facing the continent.
-
What’s the outlook for the shipping industry in 2025?All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
-
What investors can expect from stocks and the economy in 2025There are reasons for investors to be hopeful about 2025, with slowing interest rates and moderating oil prices. But trouble may be brewing in bond markets
-
Why Wise could be worth a lot more than its share price impliesForeign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
