Russian exchange traded funds (ETFs) may see gains this year. Or maybe they won’t. According to one source, Russia may experience some robust growth. The head of Russia’s biggest bank begs to differ, disregarding any chance of a quick recovery.
As stated in Xinhuanews, Morgan Stanley Chairman John Mack remarked that “our expectation is that the fastest rates of economic growth this year are expected in China, India, Brazil and Russia (BRIC).” [Russia’s ETFs: Ready to Power Up?]
“Russia still has a very strong balance sheet and low overall leverage, which remain key advantages for the country. However, it continues to lag in investment due to the volatile macro environment and weak property rights,” adds Mack.
Sberbank CEO German Gref, on the other hand, stated that “it’s clear there won’t be quick growth,” and the Central Bank’s recent decision to cut refinancing rates to record lows “isn’t a sign of the country getting stronger,” reports Will Bland for The Wall Street Journal.
The Economy Ministry says Russia’s economy expanded by a seasonally adjusted 0.7% between March and April. A recent survey of the manufacturing industry revealed a slowdown of expansion in May as compared to April.
Who’s right? Right now, Russia’s ETFs are below their long-term trend lines (the 200-day moving average), so it looks like the bears are right…for now. Wait until a clear uptrend appears again before you act – global markets could be challenged for some time. [How to Follow Trends.]
For more information on Russia, visit our Russia category.
- Market Vectors Russia ETF (NYSEArca: RSX)
- SPDR S&P Russia (NYSEArca: RBL)
- SPDR S&P Emerging Europe (NYSEArca: GUR), Russia is 65.2%
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.