International investors have made a return to Russian markets, for the first time since Autumn 2008. But analysts are warning investing in Russian equities could involve more risk than before.

A little optimism returned to the Russian markets on Monday with the RTS gaining 9% and the Micex 6%. That was in response to movements on the American markets and minor gains in the price of oil. The US markets jumped on the expectation of Senate approval for a huge economic stimulus package. Aleksandr Razuvaev, Head of Equity Research, at Sobinbank says that combined with a spinoff, for the time being, from an easing of currency speculation against the Rouble.

“We see small participation of non residents, and fundamental factors influence the global investors. There is also an inflow of speculative Russian funds that came from the currency market.”

Emerging markets are enjoying their first capital inflows since October as some semblance of risk appetite returns. Russia has tracked the other BRIC economies – Brazil, China and India. But the trend may not continue much longer with Aleksandr Fetisov, Head of Research at East Commerce believing the view of Russia and its counterparts may separate on perception Russia contains higher risk.

“Brazil China and India – well those countries are actually emerging too but, for example, the blue chips in these countries are more efficient. Russia should be treated in another way. It should be treated with a certain degree of risk, and it is treated by investors..”

But analysts generally agree that the markets will remain highly volatile with the prospect of recession hanging over any short term rallies the world's emerging markets.