By Jason Corcoran - Mar 18, 2011
Russia-focused equity funds had their first outflows in 16 weeks as investors shunned riskier assets on concern Japan’s earthquake will slow a global recovery, UralSib Financial Corp. said, citing EPFR Global data.
Outflows from Russian funds reached $58 million in the seven days to March 16, after inflows of $486 million the week before, the data compiled by Cambridge, Massachusetts-based research firm EPFR Global show.
“It’s a knee-jerk reaction to events in Japan,” Chris Weafer, chief strategist at UralSib, wrote in an e-mailed report today. “The redemption from Russia funds should be short- lived,” he said. “Continuing fighting in Libya and the threat of instability in Saudi Arabia is supporting the oil price.”
Oil, Russia’s biggest export, gained as much as $2.24 to $103.66 a barrel today. Futures slipped as much as 1.4 percent yesterday on concern damage from Japan’s earthquake and tsunami will curb demand for crude.
Russia’s benchmark Micex index has gained 3.5 percent so far in 2011, beating indexes in Brazil and India, as the biggest energy-exporting country benefits from a 23 percent advance in oil during the the past year. The 30-stock Micex gauge advanced to its highest in a more than a week, adding 0.6 percent to 1,747.32 by the 6:45 p.m. close in Moscow.
Russian markets are “cheap,” Goldman Sachs Asset Management Chairman Jim O’Neill said yesterday at the Bloomberg Link Hedge Fund Conference in London. The country is GLG Partners LP’s “favorite” emerging market and will benefit from a flight of capital away from the Middle East, Bart Turtelboom, co-head of emerging markets, said at the same event.
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