Investors for the week from 27 July to 2 August, brought $32 million from funds focused on Russia, said in the review of Sberbank CIB, citing data from EPFR (Emerging Portfolio Fund Research). A week earlier, the net outflow of investment was $6.9 million
As explained in the review, two-thirds of the outflow was accounted for by exchange-traded funds. These results were not unexpected, as until recently, crude oil prices rapidly declined, losing over a week of 7%, specified in the review. While funds focused on emerging markets in General, on the contrary, showed positive dynamics: inflows increased to $2.24 billion compared with $1.67 billion a week earlier. This contributed to the weak waiting on the fed rate hike, the report says.
In General, the Russian market looks quite attractive, because Russia is the territory of high interest rates, if we talk about bonds, says chief economist at Alfa Bank Natalia Orlova. “The outflow may be associated with the dynamics of the course: now investors have low expectation about what you can earn on the strengthening of the ruble,” she says.
According to the Director of analytical Department IK “Veles the Capital” Ivan, Monenco, $32 million is not a very significant amount of outflow. “It is possible that the outflow is related to the fact that investors decided to fix their profits, as the strengthening of the ruble was halted and its weakening. In General, Russia remains attractive to foreign investors, aided by a comfortable stock prices and high interest rates” — says the analyst.