03 May 2003 01:45
Personal Finance: Investors focus on former Soviet Bloc countries
The accession to the European Union of eight former Soviet Bloc countries is focusing the minds of investors on the
burgeoning capital markets east of Ger-many, writes John Cranage. With London and Wall Street still way off the record
share prices registered before the technology boom imploded in 2000, yields on investments in eastern Europe can look
positively exciting.
For example, Jupiter says its Emerging European Opportunities Fund has returned 12.67 per cent since it was launched
six months ago.
Fund manager Elena Shaftan says that robust economic growth and reasonably priced shares make the new EU-member
countries - Poland, Hungary, Czech Republic, Slovenia, Slovakia, Lithuania, Latvia and Estonia - and Russia 'some
of the most attractive markets for sophisticated investors over the medium term'.
In an investment note on Russia, Mark Robinson of JP Morgan Fleming, says: 'Four years ago, Western stock
markets were at their peak and Russia was in the doldrums.
'Today it is the other way round, with Russia becoming increasingly attractive as companies become more open to
foreign investors and oil prices stay high.'
Mr Robinson, co-manager of JP Morgan Fleming Russian Securities, says that political and economic reform, combined
with a burgeoning oil and gas sector, the emergence of new companies and better corporate governance, are making Russia
an interesting investment.
Set against that is Russia's reliance on oil and gas and the strengthening rouble. But he argues that the
Russian stock market - unlike the bond market - is not pricing in the significant improvements that the country, under
Vladimir Putin, is undergoing.
'We believe that Russia offers investors an unparalleled opportunity of riskadjusted rewards and a real growth
story in the global context.'
Jupiter's Elena Shaftan added: 'In Russia, vast improvements in regulations and corporate governance have
contributed to a more supportive investment environment.
'As a result of conservative fiscal policy, the economy is far more resilient to the fluctuations in the oil
price than before.
[UKIR [UK & Ireland Intelligence Wire]] |
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