Page 80 - RusRPTJun19

market, April saw a net inflow of RUB70mn ($1.1mn) into open-ended investment funds.
First as interest rates decline, bank deposits are becoming less attractive. Second, both the American and Russian stock markets have risen since last year’s lows, an opportunity perceived by investors for attractive pricing.
But the recovery is moderate—April’s net inflow is nearly ten times less than March’s net outflow—and it is being offset by the sale of bonds. Private investors withdrew RUB2.9bn ($44mn) from bond funds in April. This means that the growth in equity investments represents, more than anything, an increase in Russian investors’ risk preferences.
April also saw the steady growth of the Russian stock market. The Moscow Exchange index closed 2.5% higher in April than in March, and is up 8.5% year-to-date.The majority of April’s renewed equity demand is focused on US exposure. Funds invested in the S&P 500 and Nasdaq have been quite popular, due to the late 2018 slump in US markets (i.e. low prices) and the opportunity they present to diversify away from Russian risk.
80 RUSSIA Country Report June 2019 www.intellinews.com