Share slump creates bargains as government mulls more support
The RTS and MICEX haven't reacted as hoped after the state's $170 bln market injection. After meeting ministers Russia's main MICEX exchange said the Kremlin's now readying an even bigger commitment of its $500 Billion reserves. Aleksey Gerashchuk, Communications Director at the MICEX says the times may call for something new.
“In some period the government will think that we need some extraordinary measures, some additional extraordinary measures, to overcome the situation.”
Russian firms currently trade on as little as three times next year's earnings. The average for emerging markets is more like 10 to 12. Roland Nash, from Renaissance Capital says that offers historic opportunities to the brave.
“The biggest financial issue anyone's seen in the last 100 years. Russian stocks are some of the cheapest in the world right now. When there's blood on the streets it's time to buy.”
Any profits to be made are long-term. Uralsib Bank chief strategist Chris Weafer warned a paralyzed banking system and the threat of further defaults mean the real trial is yet to come.