“Recent underlying numbers are close to miserable. For instance, retail sales dropped 10.4% YoY vs. -9.3% expected, and capital investment declined 5.6%, although this was better than the -6.9% expected. Also, real wages figures were slightly better than expected, but -9.7% is still poor. Compared to the nominal wage growth of 4.5% in September, it’s clear where Russia’s main problem lies,” according to a Seeking Alpha post.
Nevertheless, more intrepid investors may target some of the cheapest emerging markets. For instance, Russi is currently the cheapest on absolute terms, with a forward P/E ratio for the MSCI Russia Index at 4.9, compared to its 5-year average of 5.2, according to Capital Economics.
“The low valuations accompanied by relatively healthy company fundamentals are luring a growing number of investors back to the Russian market. Earlier this week, retailer Lenta, known for its budget hypermarkets, successfully sold new shares and raised USD 150 million in capital,” notes the Seeking Alpha article.
Market Vectors Russia ETF
