Investment strategy Correspondent
Sujata's Feed
Aug 14, 2014
via Global Investing

Sanctions bite Russia but some investors are fishing

By Andrew Winterbottom

Russian stocks are up today, for the fifth day in a row and at the highest level in two weeks. What’s going on? As we wrote  here earlier in the week, foreign investors have been fleeing this market.  However it could be that some of them are starting to put aside concerns about the potential for further sanctions on Moscow and are scouring Russia’s stock markets for contrarian buying opportunities.

Russian stocks, chronically undervalued, are trading now at a discount of more than 60 percent to broader emerging markets, and to China which by all accounts is the standout beneficiary of the Russian woes. Just how cheap Russian shares are can be gauged from the fact they trade at a discount event to turbulent Pakistan. Here is a link that compares Russian equity valuations with other emerging and developed markets:  http://link.reuters.com/guv77v

Aug 14, 2014

Euro yields at record lows as economy falters; stocks up

LONDON, Aug 14 (Reuters) – Bond yields dropped to record
lows across the euro zone on Thursday and the euro hovered near
its weakest in nine months after Germany reported its economy
shrank in the second quarter, fuelling expectations of more
central bank stimulus.

The chance of more action from the European Central Bank
helped equity markets to recoup some of their early losses. So
did remarks by Russian President Vladimir Putin, who said his
country did not want conflict with the outside world
.

Aug 14, 2014

Euro yields, global stocks fall on economic setback fear

LONDON (Reuters) – Bond yields across the euro zone hit record lows on Thursday and the euro hovered near its weakest in nine months after Germany reported its economy unexpectedly shrank in the second quarter, casting doubt on the region’s fragile recovery.

Germany’s 0.2 percent contraction came after data earlier this week showed gross domestic product fell in Japan, Chinese lending declined and U.S. retail sales stalled.

Aug 14, 2014

Euro yields, stocks fall on economic setback fear

LONDON (Reuters) – Bond yields across the euro zone hit record lows on Thursday and the euro hovered near its weakest in nine months after Germany reported its economy unexpectedly shrank in the second quarter, casting doubt on the region’s fragile recovery.

Germany’s 0.2 percent contraction came after data earlier this week showed gross domestic product fell in Japan, Chinese lending declined and U.S. retail sales stalled.

Aug 8, 2014

Ukrainian company bonds hit by fear of debt restructuring, default

LONDON, Aug 8 (Reuters) – Ukrainian companies’ dollar bonds
are lower than they’ve been for months on fears the country’s
worsening economy, armed rebellion and dispute with Russia will
send more of them the way of agro firm Mriya, which has hinted
at a debt restructuring.

Mriya’s bonds due 2016 and 2018
have halved in value since it told creditors last week that high
raw materials prices, weak sales and difficulty obtaining
working capital were forcing it to “take steps to restore its
financial viability”.

Aug 7, 2014

Russian bond yields surge on food bans as emerging currencies retreat

LONDON, Aug 7 (Reuters) – Russian bond yields surged to
multi-year highs on Thursday as food import restrictions fanned
inflation fears, while the rouble hit new 4-1/2 month lows,
leading a swathe of emerging currencies slipping against the
dollar.

President Vladimir Putin ordered food import restrictions on
countries that have imposed sanctions on Moscow over the Ukraine
crisis, a decision that will hurt the West but will also
exacerbate Russian inflation and deepen its isolation.

Aug 6, 2014

Russian stocks, rouble hit 3-month low on sanctions talk

LONDON, Aug 6 (Reuters) – Russian stocks and the rouble
slumped to three-month lows on Wednesday, leading to losses
across emerging markets, as the Kremlin began to ramp up talk of
retaliatory sanctions against the West.

Developing-market assets were also pressured by the dollar’s
rise to 11-month highs. A raft of robust U.S. economic data has
investors bracing for interest rate rises in the United States
in the next six to 12 months.

Jul 25, 2014

With eye on sanctions, foreigners slash Russia stock, bond investments

LONDON, July 25 (Reuters) – Foreign equity and bond
investors who had tentatively ventured back into Russia after a
huge early-2014 selloff are again slashing their holdings for
fear of being caught in the crossfire of Western sanctions.

Russia has fared worst among the big emerging equity markets
this year, with dollar-based losses of 13 percent.

Jul 23, 2014
via Global Investing

The people buying emerging markets

We’ve written (most recently here) about all the buying interest that emerging markets have been getting from once-conservative investors such as pension funds and central banks. Last year’s taper tantrum, caused by Fed hints about ending bond buying, did not apparently deter these investors . In fact, as mom-and-pop holders of mutual funds rushed for the exits,  there is some evidence pension and sovereign  wealth  funds actually upped emerging allocations, say fund managers. And requests-for-proposals (RFPs) from these deep-pocketed investors are still flooding in,  says Peter Marber, head of emerging market investments at Loomis Sayles.

The reasoning is yield, of course, but also recognition that there is a whole new investable universe out there, Marber says:

Jul 22, 2014

Russian stocks snap losing streak; emerging index at 17-mth high

LONDON, July 22 (Reuters) – Russian stocks snapped a six-day
losing streak on Tuesday after signs pro-Moscow rebels in
Ukraine were cooperating with investigations into a downed
passenger, jet while broader emerging equities surged to
17-month highs.

The other major gainer of the day was Saudi Arabia, where
the main bourse index jumped 3.2 percent to a six-year
high after regulators said they would open the market to direct
foreign investment, a move that could bring the country into
mainstream equity indexes next year.