Investors Effuse About Russian Market But Need Clarity On Ukraine Outcome - US Investor

WASHINGTON (Pakistan Point News / Sputnik - 13th September, 2022) Western investors are excited about the opportunities in the Russian market, which has been artificially affected by sanctions, but they need more clarity on the possible outcomes of the special military operation in Ukraine, financial services firm Sovereign Wealth Management CEO Gary Korolev told Sputnik.

"Western investors with long-time horizons are salivating over potential gains that can be made in a market which has been artificially suppressed due to the current sanctions. Any dislocation created artificially is a great opportunity for a patient investor," Korolev said. "The current price of the Russian stock market is at a 40% discount to its pre-February 24 value, the market has traded sideways since that date. This is because the market is waiting for more clarity on the outcome."

Korolev explained that the Shiller CAPE Ratio, the classic method of comparing the value versus the price of a market, was already among the best in the world even prior to February 24 when Russia launched its special military operation in Ukraine.

"Now every ruble of earnings can be bought for a 40% discount to even that incredible number. Currency volatility should not be a huge concern since Russia has shown it wants to keep the Ruble pegged around 60 rubles per Dollar and has proven the ability to keep its currency stable under extreme conditions."

Korolev said that potential investments depend great deal on the outcome of the conflict in Ukraine since if the collective West succeeds in supporting Kiev to a victory, it would be much harder for the current Russian administration to continue with its long-term economic and geopolitical strategy.

"A defeat of Russia in Ukraine would likely mean the return of the 90s to Russia," Korolev said. "If Russia is able to be perceived as a winner and to suppress the anti-Russian threat emanating out of Ukraine, any investor able to hold on their Russian equities prior to this outcome as being perceived as probably by the markets, will be rewarded handsomely."

In April, Russia sent a note to NATO member states condemning their military assistance to Ukraine. Russian Foreign Minister Sergey Lavrov warned that any arms shipments on the Ukrainian territory would be "legitimate targets" for Russian forces.

The Western sanctions against Russia have resulted in disruptions of supply chains and a spike in energy and food prices worldwide. Russian President Vladimir Putin has said that the policy of containing and weakening Moscow is part of collective West's long-term strategy and its sanctions have affected the entire global economy and worsened the lives of millions of people.