 |
"The fact that 60% of the fund is invested in Russia is an indicator of how bullish we feel about the country and its relative isolation from global headwinds" |
He claims that emerging Europe has sufficient internal momentum to generate good economic performance even if the US economy slows down. "The investment potential to be found in the emerging markets of eastern Europe has been attracting interest for several years. However, we still believe that the long-term prospects for these markets remain positive. Asian demand for rich natural resources, rapid infrastructure growth and an increase in domestic consumerism will contribute to the economic growth of the region, boosting the investment returns."
In particular, Majdaniuk believes that Russia remains an attractive investment option despite a lacklustre market performance in 2007. "Russia is known to be a rich supplier of oil and gas. However, it is also a significant supplier of industrial commodities such as nickel, copper, palladium and iron ore, all of which satisfy some of the Chinese commodity demand."
On the domestic demand front, Majdaniuk says Russian banks, utilities, mobile operators and steel stocks will all benefit from rising consumer spending and increasing expenditure on infrastructure respectively.