Research Notes

Positive news on the macroeconomic front this summer allowed market participants to take an optimistic view of a rise in the market capitalization of Russian assets, since benchmark RTS Index climbed 18% from May 15 to July 15. We believe that the rally which emerged on the market in May will continue and most of the events under our forecast will have a positive impact on the investment appeal of Russian assets. Nonetheless, given current risks we expect to see cautious growth in capitalization of the Russian equity market to 810 (RTS) by the end of the year.

We reflected our expectations for upside prospects of domestic stocks in the structure of model portfolios, in which assets are strategically allocated on the basis of fundamental research and in line with optimal risk/yield ratios for investors of various categories. In addition, the structure of our model portfolio has been modified for each of three investment strategies: conservative, balanced and aggressive.

Simon Birg

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