Hexam raises Russia weighting to 50%

Investment growth in Russia is “phenomenal” and can even be compared to booming China, Hexam says.

Marina Akopian, Hexam’s $70m EMEA Absolute Return fund manager, says she has steadily boosted her weighting in the former Soviet state since March, currently at the 50% maximum allowed.

She says the country’s fixed investment growth recently hit 27.2%, a 15-year high.

“Russia is no longer just a commodities play,” Akopian says.

“The fixed investment growth in the economy compares favourably to China and it is benefiting a number of sectors.”

She cites banking, utilities, telecommunications, construction and cement as sectors worth investing in.

With retail sales up 15% in June after a strong May, and a 7% unemployment rate, Akopian predicts high oil prices to continue to drive the economy.

However, she doesn't think these oil companies will return in the long term, preferring to look at stocks such as steel as the Putin government spends heavily on infrastructure.

Akopian also feels the 2008 presidential elections will not alter investment prospects too much.

“Concerns over democracy in Russia do not impact on the market and are no impediment to making money,” she says.

“China is far from being called a democracy but that is no obstacle to investors.

“All major listed companies in Russia are rigorously audited by reputable international firms and transparency has improved dramatically over the past decade.”

Hexam Capital is Resolution Asset Management’s third 50/50 joint venture boutique and is focused on emerging market opportunities.

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