Russian markets circling before election lands
27 Feb, 2012 13:43
Russian markets are all calm and quite ahead of the Presidential elections the coming Sunday, as investors prefer to sit and wait. The political factor is already priced in, experts agree, yet, there’s still concern over what policies will come next.
“The extra Russian political risk has almost been washed away,” says Chris Weafer, Chief Strategist at Troika Dialog. “Many investors may, however, wait to ensure there is no final surprise in the forthcoming election before raising their Russia bets,” he added.Historically, investors prefer to remain in the shadow ahead of huge political events, as risks always mount during this time, Aleksandre Ryvkin, a senior markets specialist at Metropol IFC, told Business RT. The risks in Russia are currently about the composition of a new Cabinet of Ministers and the future economic course rather than about the person likely to be elected, he added.It’s the quiet after the storm as Russian markets were trembling in December as protesters filled the squares of Moscow every other week-end following the Parliamentary elections.A new opinion poll from Levada, shows two thirds of Russians who have made up their minds about Sunday’s Presidential election say they are going to vote for Vladimir Putin. “The Levada opinion poll has at least had a positive effect to investor sentiment because many commentators had been citing the January poll, which showed Putin’s expected vote share at only 37%, as a reason to expect either a surprise outcome or a 2nd round,” Chris Weafer of Troika Dialog explains.Indeed, the Russian markets are basically cooling on Monday, after a major rally on Friday, Pavel Krapchitov, a managing director at MDM managing company, told Finam. “After a 4%-5% increase some shares are becoming 1% cheaper, but no a massive correction is expected,” as money is still coming to the market, from the ECB in particular, and the oil prices remain high, Krapchitov concluded.