Russian ruble will be 'star performer': strategist
Liquidity in the Russian ruble market will increase over the coming days; one strategist says this might be the time to buy
After the long Christmas break, the domestic Russian market will reopen on Wednesday.
The Russian currency (RUB) outperformed other currencies in Europe, the Middle East and Africa since the start of the year albeit in low volumes, so its first move when the Russian market opens could point towards a weaker ruble, Benoit Anne, a strategist with Societe Generale, said.
But he added that the weakness will likely be temporary and investors should watch for an attractive entry level if the ruble does go on a weaker footing.
We are fundamentally bullish on the RUB, especially over the first part of the year, said Anne.
There are many supportive factors, including the strong improvement in the global risk backdrop, the strengthening of the domestic policy framework, both on the monetary and fiscal sides, and last but not least the impact of the much-awaited liberalization of the local bond market.
Starting this year, foreign investors will be able to buy and sell Russian ruble-denominated Treasury bonds, the so-called OFZ, through Euroclear, the worlds biggest bond settlement system.
|More from Emergingmarkets.org|
|War and Peace: Investing in Russia|
|What big emerging markets did the crisis hit?|
|Raiffeisen Bank will continue growth in Russia|
Anne expects the opening of the OFZ market to bring major capital inflows to Russia.
At the same time, the downside risks to oil prices appear to be limited at this point due to the improvement in the global economic outlook, which should be supportive for the Russian currency as well, he said.
On this basis, we look forward to watching the RUB price action over the next few daysstarting tomorrow- with the view that the RUB will likely be a star performer in the emerging markets foreign exchange universe.