Rising commodity prices and Russia’s quick fixes for its financial system provided the necessary catalyst for a surge in the country’s stock markets and exchange traded funds (ETFs) last year. Growth could continue to be driven by the two areas in the new year.
The benchmark Russian Trading System (RTS) index and the Moscow Interbank Currency Exchange (MICEX) both jumped more than 120% in 2009, so analysts are feeling that the good times could continue through 2010, according to China View. The best-performing sectors in Russia were banks, telecommunications and oil companies. [Where the BRICs are today.]
Russia’s getting an assist on a couple fronts:
- The Russian markets were bolstered by the governmental measures that flushed the banking system with cash, provided guarantees and propped up the ruble.
- The swift rebound in commodity prices and increase in demand for energy, metals and other natural resources also helped Russia’s recovery. Of course, the new Turkmenistan-Iran gas link could usurp some of the control that Russia has over pipelines in that region, making it even more important for the country to diversify its industries. [The best ETFs of 2009.]
Analysts are split when it comes to the Russian stock market, with one camp proclaiming it a bull market and the other calling it a bear market rally. Still, analysts and officials are both optimistic about the outlook for the Russian financial market in 2010.
Upbeat projections for the Russian stock market puts growth as high as 35% for the year, in some cases. [Why Russia may extend gains into 2010.]
For more information on Russia, visit our Russia category.
- Market Vectors Russia (NYSEArca: RSX): up 110.9% in the last year
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.