2017: Forget sanctions, Russia is a buy

We said:

Apart from enjoying the tailwinds that GEMs in general are experiencing, Russia is benefiting from a number of idiosyncratic factors and is particularly appealing.

In short, we think that even though the US Congress approved fresh sanctions against Russia, new geopolitical risks are unlikely to crystallise. The relatively muted market response to the passage of the sanctions legislation suggests that most of the potential bad news is reflected in today’s cheap valuations. Besides, a broad-based economic recovery is evident in Russia, fuelled by increasing real wages and a rebound in retail sales. Importantly, orthodox monetary and fiscal policies continue to enjoy political support, which should help the rouble recover a little from recent weakness. Oil, a major determinant of the performance of Russian assets, may not be massively supportive given that current levels are close to the top end of what we regard as a reasonable range ($45-50/bbl). At the same time, continued dollar weakness would probably put a floor under crude prices. 

We therefore add a long position in RTSI$ futures as this gives exposure to both Russian equities and the RUB.

Outcome:

On 30 August 2017 we raised the stop loss to 1015 to protect profits. 

On 13 September 2017 we raised the stop loss to 1070, locking in profit of 6% since inception. 

On 11 October 2017 we raised the stop loss to 1100, locking in profit of 8% since inception. 

Profit taking level of 1200 was hit on 4 January 2018 . We closed the trade for a profit of 18.2%. 

Economics

02 Feb 2005
01 Sep 2004
12 Aug 2004
05 May 2004
20 Jul 2000
01 Apr 1999
06 Jan 1999
01 Sep 1997
06 Jun 1995
10 Feb 1994
10 Mar 1993
06 Feb 1992
10 Dec 1991
03 Jan 1990

Politics

Markets

15 Apr 2016
16 Oct 2015
25 Nov 2013
20 Dec 2012
20 May 2004
03 Jul 2001
VIDEO

Video

View our summary videos on fast trending topics. To listen to a recording of our Conference Calls, please get in touch with zdl@tslombard.com

READ MORE
TRACK RECORD

Track Record

We have a 29 year track record of successful calls. Many of these calls combined economic, political and market analysis.

READ MORE
PRESS

Press

To request an interview with a member of our team, please get in touch zdl@tslombard.com .

READ MORE

Menu

Client Login


Don't have an account? CREATE YOUR ACCOUNT
READ MEET TALK