Page 69 - RusRPTSept20

8.3 Stock market
8.3.1 Equity market dynamics
Russian assets saw about $50mn inflow into combined equity and bonds in the week ending August 26, down from the $110mn inflow seen on the previous week, BCS Global Markets wrote on August 28 citing the EPFR data.
"Fund flows failed to maintain positive momentum as outflows from Russia funds returned on Navalny poisoning allegations and Belarus protests," BCS GM analysts wrote, reiterating a previous warning that these events could hurt sentiment on Russia.
In the reporting week on the equity side Russia-dedicated funds saw $10mn outflow (versus $40mn inflow in the previous week), while combined funds saw an outflow of $30mn (versus $50mn inflow in the previous week).
Bonds continued to outperform equity and maintained inflows on the reporting week. Russia-dedicated bond funds posted $10mn inflow (unchanged week on week), while combined funds showed $80mn inflow (versus $60mn in the previous week), marking the best inflow since early June.
While outflows from Russia funds returned on the Alexei Navalny poisoning case and ongoing Belarus protests, the positive vaccine developments and recent underperformance should support EM stocks in the medium term, BCS GM analysts believe.
As for strong performance of the bonds, the ongoing interest to EM bonds remained, as GEM bond funds received net $1.5bn, the largest inflow into this fund category since early June.
"As a result, inflows into the Russian bond market from all fund categories continued for the eighth consecutive week," BCS GM notes.
Global investor sentiment towards emerging markets (EMs) improved again in the week ending August 19, according to data from EPFR Global and inflows into Russian funds improved week on week.
69 RUSSIA Country Report September 2020 www.intellinews.com