The 2014 Emerging EMEA Research Team: Emerging-Europe Equity Strategy, No. 3: Yaroslav Lissovolik & team

Yaroslav Lissovolik & team
Deutsche Bank

First-place appearances: 0

Total appearances: 4

Team debut: 2011

Advancing from runner-up after three years, Deutsche Bank secures third place. The Moscow–based group of four strategists is directed by Yaroslav Lissovolik, “the best stock picker of any of the strategists covering Russia and emerging Europe,” in the opinion of one admirer. “He is very objective and consistent in his views of what’s right or wrong with a stock and doesn’t react to day-to-day events.” Bashneft is one of the Deutsche crew’s favorites going forward, in part on the expectation that the Russian integrated oil operator will continue to produce a double-digit dividend yield, assuming the price of Brent crude oil remains at or above $100 per barrel in 2014, and positive effects of the ruble’s remaining at its currently low level through year’s end. Finally, Lissovolik adds, “Bashneft may benefit from a potential decision by its principal shareholder, AFK Sistema, to place Bashneft shares in London by fall 2014.” At 3,000 rubles, the analysts’ target price represents a 33 percent upside to the shares’ value at the end of May. The strategists also recommend that investors buy Hungary’s OTP Bank, among the region’s largest independent financial services providers. OTP exhibits an increasingly strong balance sheet marked by liquidity, solvency and a low percentage of nonperforming loans, they advise, prompting expectation of a gradual rerating of the stock as the markets recognize the diminution of such risks as the foreign exchange mortgage issue in Hungary and difficulties attending commerce between Russian and Ukrainian businesses. Trading at 4,853 forint in late May, the shares are projected to rise as high as 5,000 forint as “supportive macro drivers come to the fore,” Lissovolik says.

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