Page 84 - RusRPTDec20

9 trading. The consumer goods sector also gained about the same and is now returning a positive 6% YTD.
The rest of the sectors are still underwater from where they stood at the end of February but most of them gained 2-3ppt on the day. Most noticeably the oil & gas sector was lifted 8ppt from a -42% lost YTD to end the day down at -36%. However, that is still down from the roughly 33% loss the sector was showing a month ago and investors remain very sceptical of the sector.
The best performer of the day was Aeroflot that added almost 8% on the day as of 4pm Moscow-time, while energy companies Lukoil, Tatneft and Novatek claimed the next three spots on the leaderboard.
Still, Russian gains lagged the market increases across Europe, where the London benchmark FTSE 100 was up by more than 5% and the Eurostoxx 50, which tracks the 50 largest companies based in the Eurozone, added more than 6%, reports the Moscow Times.
Markets have also been lifted by Joe Biden’s victory in the US elections. While Biden is expected to be tough on Russia and introduce more sanctions, those fears are off set by the return to more predictable “normal” politics that will allow better forecasting. Also a key change will be Biden is expected to abandon US president Donald Trump’s policy of starting trade wars which is very damaging not only for the balance of payments, but has also proven a big disincentive to foreign investors, who increasingly invested in the US as a hedge against getting caught up in a trade war. That is expected to change now and with US capital going overseas again under Biden in the hunt for better returns, according to Charlie Robinson, chief economist at Renaissance Capital.
Investors stay positive on EM stocks, but not on Russia as Biden wins the US election.
Outflows from Russia-dedicated funds returned in the first week of November with both active funds and ETFs reporting net outtakes. GEM equity funds saw another $405mn of inflows – 5 consecutive weeks of inflows by now.
Country-wise, the two amazing weeks of inflows into China funds with more than $2bn inflows in each paused, as the total weekly intake was only $155mn. A 5-week inflow spree into Mexico also stopped with total net outflows of $86mn. Analysts believe investors will continue to favor EM assets if Joe Biden wins the race, but Russia will likely be an orphan in that cheerful spirit.
Bonds: Inflows into GEM bond funds decelerate to a 4-week low. Inflows into GEM bond funds decelerated further to $378mn – the smallest amount in five weeks. Steady interest in EM bonds has continued unscathed since July with mostly local Russia-dedicated funds also reporting small, but steady intakes for 23 weeks in a row now.
84 ​RUSSIA Country Report​ December 2020 www.intellinews.com