Damaged by the Georgia conflict, Russia's stock market has lost almost a third of its value in the last two months, according to Michael Konstantinov, manager of the Allianz RCM BRIC Stars fund.
He believes Russia’s economy is close to 'tipping point' as the present market is almost 35% under its peak and is trading close to seven times current earnings. “The current Georgia situation was preceded by Putin’s attacks on Mechel, the mining and metallurgical firm, at the end of last month as well as the recent weakness in oil prices. “Hence, the Russian market trades at huge discounts in an international comparison and is discounting a lot of negative news flow." Konstantinov has reduced Allianz’s exposure to Russia to 25% of the total BRIC portfolio, mainly through cuts to energ...
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