Why foreign investors reduced their investments in Russia – Russian Oil

«Oil of Russia», 21.03.15, Moscow, 09:44 After a two-month break international investors began to withdraw funds from the Russian stock market. While the outflow of small – for the past week investors have withdrawn from funds focused on Russia, at least $ 60 million. However, the decline in oil prices and tightening rhetoric of western countries to mark the anniversary of the annexation of Crimea to Russia, led investors to reduce the presence of the Russian market.

These Emerging Portfolio Fund Research (EPFR) indicate that international investors, for seven weeks to increase investment in the Russian stock market began to pick them up. From 5 to March 18, funds focused on Russia, lost $ 57.7 million. However, this does not seem reckless flight on a background of $ 570 million, which investors have invested in the previous two months.

On the declining popularity ruble-denominated assets in the eyes of foreign investors indicates the March survey of portfolio managers, analysts held Bank of America Merrill Lynch. According to a survey by the attractiveness of investment Russia closes the list of developing countries. However, the outflow of investments was recorded in most of the regional and country funds. According to EPFR, for the reporting week, all emerging market funds lost $ 2.7 billion.

Care investors from Russian stocks took place against the backdrop of falling oil prices, which began in the second half of March. For a week the price of Brent crude fell by 2%, to $ 54.5 per barrel. Cost of Russian Urals oil has declined over this period by almost 3%, to $ 51.4 per barrel. Since early March, oil prices have fallen by 12-15%. “Historically dependence of the domestic stock market indices and the ruble exchange rate dynamics of oil prices largely determines the behavior of foreign investors”, – said the director of strategic investments IR “Region” Valery Friday.

The nervousness of international investors has increased to background of worsening geopolitical environment around Russia. On Monday, the anniversary of the annexation of Crimea to Russia, US State Department spokesman Jen Psak accused Russia of repression of ethnic minorities Peninsula. Ms. Psak noted that “sanctions related to the Crimea will remain in force as long as the occupation continues it.” On the same day, German Chancellor Angela Merkel said that the West is ready for new sanctions against Russia.

“The tightening of rhetoric from the US and Germany, as well as the extension of the anti-Russian sanctions and discuss plans arms supplies to Ukraine worsened the mood of foreign investors “, – said the managing director of IG” Trinfiko “Yegor Krotkov.

However, experts do not expect a prolonged outflow of funds from Russian assets. “Talking about the turn of the dynamics and the formation of a stable tendency to an outflow of funds of funds is still too early. In the near future we may see an increase in risk appetite, and as a result, inflows to the” pro-Russian “funds will resume,” – said portfolio manager “Alfa Capital “Andrey Dyachenko. According to the head of analytical department of “Ingosstrakh Investments” Eugene Vorobiev, interest in Russian assets cautious support of the Federal Reserve System in the matter of tightening monetary policy, which has caused a moderate increase in oil prices at the end of the week and the weakening of the dollar against other major currencies.

Vitaly Gaydayev Learn more at http://www.oilru.com/news/453518/