Russia-China Prove Cheap to Investors as Money Flows Rise
By Ye Xie Sep 2, 2014 3:15 PM ET
For all the concern about the prospect of tougher international sanctions and signs of slowing growth, more money flowed last month into Russia and China exchange-traded funds than any other emerging markets.
U.S.-based ETFs focused on Russia attracted $265 million last month, or 14 percent of their market value, the most among 47 regions after Portugal and Hong Kong, according to data compiled by Bloomberg. That was followed by Chinese funds, which drew $944 million, equivalent to 10 percent of their value.
Traders added to their Russian holdings as the six-month old conflict with Ukraine pushed the benchmark Micex Index (INDEXCF) to the steepest discount to emerging-market peers since 2008. In China, the Shanghai Composite Index rose to a 15-month high as weaker-than-expected economic data fueled speculation policy makers may take steps to boost growth.
“It appears that investors don’t believe that the situation in Russia will worsen much further from where we are now and expect the indices to bounce again from oversold levels,” Elena Ogram, a Zurich-based investor at Bank Bellevue AG, said by e-mail yesterday. The Chinese stocks are buoyed by the prospect of economic stimulus from the government, she said.
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http://www.bloomberg.com/news/2014-09-02/russia-china-prove-cheap-to-investors-as-money-flows-rise.html
