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Russian rally expected
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December 4, 1996: 8:02 p.m. ET
Analysts say tumbling interest rates should encourage investment
From Correspondent Todd Benjamin
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LONDON (CNNfn) -- Market traders in Russia are bracing for a rush of buying later this month. The nation's market has already climbed almost 120 percent this year -- second only to China -- and shows no signs of cooling.
Russia's rally comes despite some normally unsettling events including the presidential election and President Boris Yeltsin's health.
"Now if you look forward for the next few months, there will always surprises in Russia. There are no big obvious factors on the horizon in the way that there was earlier this year when we had the elections to worry about," said Charles Harman, chief executive of MS Securities.
Analysts say stocks still look cheap and many companies are grossly undervalued. Things also look good on the economic front. Inflation, which stood at 131 percent last year, should reach 21 percent before the end of the year.
Philip Manduca, emerging markets specialist at Eldon Capital Management, said the improving economic fortunes should encourage Russians to put their savings into the stock market. (173K WAV) or (173K AIFF)
The pool of overseas investors is expected to broaden, market regulation has been tightened, Russian companies are adopting stricter accounting standards and political worries have eased.
Put together, those factors mean the Russian market should stay hot well though the country's long winter.
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