Page 6 - RusRPTJul19

The RTS has broken out of its 900-1300 band where it has been stuck for the last five years, and while equity prices could continue the Russian market is and will remain massively undervalued for the time being.
Politically president Vladimir Putin held one of his marathon phone-ins in June. The talk was all about domestic issues – health, rubbish tips, incomes – and the take away was Putin is probably in his weakest position since taking office in 2000 as six years of stagnant incomes has irked the population who are at the same time becoming more politically sophisticated. The government has launched a RUB27 trillion investment programme called the national projects, but it will take at least another year until the beneficial effects of this spending are felt.
International the pressure on Russia seems to be coming off. In a notable concession, Russia was readmitted to the Parliamentary Assembly of the Council of Europe (PACE), the second set of sanctions that has been lifted, following the withdrawal of sanctions on aluminium producer RusAl earlier this year. Last year’s April round of sanctions, mostly on oligarch Oleg Deripaska and his Rusal aluminium producer, were withdrawn – the first sanctions to be dropped since 2014 – and at the end of June Russia was also readmitted to Parliamentary Assembly of the Council of Europe (PACE) – the second time some sanctions were dropped.
Clearly Europe wants to move away from sanctions, but the US government is still committed to them so the sanctions outlook remains confused.
6 RUSSIA Country Report July 2019 www.intellinews.com