Investor interest in Russian equities dropped more than two thirds over the past month over risks related with Cyprus and falling commodity prices.
The number of investors
working with developing markets and ready to take Russian risks
slipped from 67% in March to 20% in April, according to a study by
Bank of America Merrill Lynch, Vedomosti daily
reports.
The research is based on a poll of 252 portfolio managers from companies operating both on the global and regional markets. Assets under their management totalled $725 billion.
The overall decline of global investor interest in commodities and equities of developing markets couldn’t have bypassed Russia, Swathi Putcha, an advisor at Merrill Lynch told Vedomosti. A drop in oil prices, slowing global economic growth and the prospect of deflation in the Eurozone only added to the negative sentiment.
According to the expert major Russian risks are the state’s tight relationship to debt-burdened Cyprus and the situation with TNK-BP.
The last time investor interest in Russia was as low was in November last year and before that in June. Over $1 billion has been withdrawn from Russia-oriented funds since the beginning of 2013.
Turkey and Thailand are now seen as the most attractive developing markets. From 50% to 60% of the respondents said they expanded their investments into these states. Interest in investing in China remains low.