Page 13 - bne_newspaper_February_22_2019

bne Invest
February 22, 2019 www.intellinews.com I Page 13
Stocks recover quickly following US fund manager Michael Calvey's arrest
bne IntelliNews
Russian stocks tumbled briefly following the news of the detention of prominent US-born fund manager Michael Calvey on February 14, but recovered most of the ground lost during the next day of trading.
Stocks dived by 3% on the day the news broke, but as bne IntelliNews argued in a blog “MOSCOW BLOG: Is the arrest of US fund manager Michael Calvey a litmus test for Russia?” unless the case becomes political it is unlikely to have a big impact on the Russian equity market, and even if it does become political it is hard to see how the affair could do more damage than has already been done by previous scandals.
“Russian equities rebounded on February 15 amid stronger oil prices and decent performance in global markets. Having dropped nearly 5% on the two previous days, the RTS index gained 1.8%. Global equity markets were rallying on signs of sig- nificant progress in US-China trade talks. The S&P 500 advanced 1.1%, extending its YTD gains to 11%. Meanwhile, European markets were up 1.5-2.0%,
and Asian markets are trading 2% higher as we write this morning,” Andery Kuznetsov of Sberbank CIB said in a note.
The dollar denominated Russia Trading System (RTS) has gained 10% YTD, down from the 14% gain it was showing a week earlier, but as the chart of the RTS over the last year, the index remains range-bound and trading at approximately 1,000 for the last few years.
The RTS’s sister index, ruble denominated Moscow Exchange Index (MOEX), is also up 6% YTD, down very slightly from the 7% gain it was showing a week ago.
So far the Calvey affair has had little visible impact on the valuation of Russian equities.
Calvey founded Baring Vostok Capital Partners (BVCP) in 1994 and has made a string of extremely successful bets. He was detained along with five BVCP partners on February 14 in connection to
a shareholders’ dispute over the Orient Express