Is there hope for investors in Russia?

ON RUSSIA

Russia is everyone's least favourite stock market. The market has fallen some 18% this year in US dollars, poor even compared to a weak MSCI Emerging Markets index which is down 14% to 21 June.

Investors fret about governance and the end of the commodity super-cycle, as China and the rest of the world slows. Trading volumes in Russian shares are now almost as low as they were in early 2009, and scarcely a quarter of their bull market highs. There are, however, some good things coming out of Russia. The simplest argument for Russian equities is that they are cheap. They certainly are, with a forward P/E ratio of below 5 times, compared to 13 times for the FTSE 100. Even by Russian standards, this is low relative to other countries, a discount of over 50% to emerging markets a...