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As investors scour the world in search of bargains, the more intrepid are taking a closer look at deeply troubled Russia in the belief conditions can't possibly get any worse. And there is growing evidence that they may be right.

Both the latest data and anecdotal findings show the resilient Russians are coping better than many analysts expected. The economy is still headed for a deep recession this year – the Kremlin's own forecast is a decline of 3 per cent, and that's considered optimistic. But the ruble has halted its headlong slide into oblivion, the central bank is no longer bleeding reserves and corporate Russia is benefiting from reduced competition at home (because of sanctions) and stronger export demand and higher profitability, thanks to the devalued currency.

For all its well-documented economic woes, "Russia is managing to avoid a precipitous collapse in GDP growth" and is likely to be on the way to a recovery by 2017, Phoenix Kalen, an emerging-market strategist with Société Générale, says in a report titled The Empire Strikes Back.

Capital is still fleeing the country, but Russia is doing a better job of repatriating assets held outside the country.

As for the ragged ruble, "resilience since the start of the year and the [central bank's] ongoing efforts to stabilize financial markets have noticeably strengthened public confidence in the local currency," Ms. Kalen said after two days of meetings in Moscow with officials, bankers, executives, fund managers and local economists.

In their own detailed assessment, BCA Research's geopolitical strategists argue that "Russia may be the most attractive major equity market in the world, on valuation alone." One plus is that tensions with Ukraine and by extension, the West, "are clearly de-escalating."

But they caution that after a 15-per-cent runup in stocks this year, "investors should buy Russian equities from this point onwards only if they think oil prices are about to take off." Otherwise, the best way to play the Russian revival and the lowering of the political risk premium is through the currency markets, the analysts suggest.

"Further sanctions against Russia remain a potential risk to our positive view on the currency," the BCA report says. "However, it is highly unlikely that Europe will impose new economically significant sanctions, provided that our de-escalation thesis is indeed correct."

Before the rest of us start toasting the revival of another BRIC member (India has been hogging all the favourable ink lately) it's important to underline that the Russian story wasn't compelling even before oil prices nosedived and President Vladimir Putin's bellicose actions in Ukraine provoked Western sanctions that have hamstrung Russian financial institutions and other major corporate borrowers in international capital markets.

The country's largest bank, state-controlled Sberbank, reported last week that profit plunged 24 per cent in its third quarter and it's boosting provisions for loan losses in what it expects will be a difficult 2015.

And the long-term outlook for Russian investment remains clouded, regardless of whether sanctions are lifted and oil prices recover.

"Thus far, there is no evidence that President Putin is preparing a set of pro-market, investor-friendly reforms as a response to the collapse in oil prices and economic sanctions," BCA says.

Market reforms or even a Chinese-style assault on corruption have never been high on Mr. Putin's to-do list, and that's not about to change any time soon.