For once Russia has been an island of stability among the turbulent global equity markets. While bourses in other countries have been hit by jitters over the US economic slowdown and the threat of default in Argentina and Turkey, Russia's stock market has put in a solid performance, ending the first half of this year as the third best performing market in the world. The Russian Trading System (RTS) index has risen by more than half.
Until this year the RTS used to slavishly follow international markets, with the Nasdaq dominating. But over the past six months Russia has decoupled and is now being driven by a combination of domestic investor sentiment, Russian companies hoovering up shares as part of consolidation, and the modest reappearance of international portfolio investors attracted by decent returns. High international commodity prices and strong exports combined with structural reforms have boosted confidence in Russian stocks.