Christopher Weafer, who spent the past four years in third place, vaults to the summit on behalf of Sberbank CIB. “The valuation gap between Russian equities and their emerging-markets peers is far too wide currently because of legacy perceptions about Russia risk,” he asserts. “For instance, the price of oil is no longer as critical to the economy as was once the case, but investors still do not factor that in. It is also because Russia does not have a meaningful domestic investor base and is far too reliant on foreign investor money, which has led to greater market volatility and cheaper valuations.” The 57-year-old strategist expects the situation to change shortly. “The gap will start to shrink in the second half as the economy is expected to pick up in the third and fourth quarters,” he contends. “I also believe that we will see a more proactive approach from the government in terms of economic policies and investment stimulus.” Weafer is upbeat on banks, construction companies, information technology services providers, pharmaceuticals manufacturers and retailers. “These sectors are much more exposed to the expanding domestic economy and to the growth of Russia’s middle class, with its rising spending power,” he explains. “On average, they also trade at a lower rating than their peers in other emerging markets but have higher average earnings growth.” Weafer spent seven years as a senior investment manager with the Abu Dhabi Investment Authority before joining Troika Dialog as head of research in 1998. He moved to Alfa Bank and then UralSib Capital before returning to Troika in 2011, shortly before it was acquired by Sberbank. He left in April and is considering establishing a bespoke consulting firm for macro hedge funds and foreign corporates looking to understand investment risk and business opportunities in Russia. — Thomas W. Johnson |
Economics & Strategy – Equity Strategy: First
