“All investors are asking themselves — OK, the Russian companies look attractive right now, but what about the next six months, what about the next 12 months?” Alexandre Dimitrov, head of Emerging Europe EQ Funds at Erste Sparinvest Kap Mbh, told Bloomberg. “Everyone is looking at November, when we have mid-term U.S. Congress elections and the new sanctions against Russia.”
Meanwhile, an agreement between the Organization of Petroleum Exporting Countries, along with its allies, in June to relax output curbs allowed Russian oil companies to bolster production, especially in the wake of U.S. sanctions on Iran, which will leave a gap in global production. The sudden boon has some in the industry projecting a new post-Soviet record this month.
Ekaterina Iliouchenko, a money manager at Union Investment Privatfonds GmbH, argued that Russian producers are an an attractive long-term play because of their low extraction costs globally, focus on domestic projects with a long reserve lifespan and growing dividend yields.
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