Page 82 - RUSRptSept18

RTS value should be 1,541. Analysts agree that the RTS is probably undervalued: BCS Global Markets has a year end target fro the index of 1,350, but given the higher than expected oil prices so far this year, even that looks conservative – if it weren’t for the politics dogfight between Moscow and Washington.
8.4 International ratings
Fitch Ratings confirmed Russia's sovereign long-term foreign and local currency Issuer Default Ratings (IDRs) at the lowest investment-grade 'BBB-' category with Positive outlook, the agency said on August 17.
In June Fitch slightly downgraded Russia's growth outlook , while seeing limited near-term economic gains from higher oil prices and warning that boosting weak medium-term growth prospects is a key challenge for the new government.
In the latest rating action Fitch again highlighted Russia's strong fiscal position and external finances, reiterated trust in the economic policy, but cut the 2019 growth forecast and warned against higher sanction risks .
"Russia's ratings balance a strong sovereign balance sheet, robust external finances and a credible macroeconomic policy framework against weaker growth prospects than peers, high commodity dependence, weak governance standards and geopolitical tensions," the agency wrote.
The Positive outlook on the ratings reflects continued progress in strengthening the economic policy framework underpinned by a more flexible exchange rate, a strong commitment to inflation- targeting and a prudent fiscal strategy.
Fitch sees this policy mix as contributing to improved macro stability and improved the economy's resilience to shocks together with robust external and fiscal balance sheets.
While the economy "has coped well with the new round of US sanctions announced in April", Fitch admits that the "prospect of additional harsher US sanctions has materially increased since our last review in February." Sanctions pose risks for sovereign financing flexibility, private sector access to international financing, macroeconomic volatility, as well as weigh on growth prospects.
82 RUSSIA Country Report September 2018 www.intellinews.com