RUSSIA - The Russian market is likely to improve in the short term as investor's "appetite for risk" is on the upswing, the Eastern European Trust (EET), managed by Pictet Asset Management, has predicted.
The ETT, which aims to achieve long-term capital growth from a diversified portfolio of companies in Central and Eastern Europe, believes that the global environment remains supportive of equities in general and the appetite for risk is on the upswing.
John-Paul Smith, fund manager with the trust, noted that the FTSE Emerging Europe index, the trust’s benchmark was already up sharply over the last month.
Smith commented: “In Russia, investor sentiment is improving and the market is likely to rise in the short term. The IPO of Novatek, an independent Russian gas producer, appears to be at least 15 times oversubscribed.
“Strong market performance over the past few weeks was underpinned by some long awaited new international money coming into the country. However, risks remain in the country. Overall much needed structural reforms still shows few signs of emerging.”
Smith added: “During June, the trust increased its weighting in the Baltic region, participating in the IPO of Starman in Estonia and the SPO of Grindeks in Latvia.”
Currently, the country breakdown of the trust is as follows: Russia 43%,Turkey 25%, Hungary 17.2% Poland 10%, Central Asia 2%, Croatia 2.4%, Czech Republic 4%, Ukraine 3.9%, Romania 0.8%, Estonia 1.1%, Other CIS 1.7%
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