The 2014 Emerging EMEA Research Team: Emerging-Europe Equity Strategy, No. 2: Alexey Zabotkin & team

VTB Capital fell from this ranking in 2013, a year after topping the list, and now the firm is back in impressive fashion, claiming the No. 2 spot. Alexey Zabotkin leads the three-person, Moscow-based squad, which “as a local player is better connected than some of the bigger international houses,” one supporter asserts. “They consistently bring stocks to my attention that others ignore or neglect.” Among the strategists’ top picks is Russian energy giant Gazprom. Catalysts, Zabotkin notes, include the company’s “30-year contract with China, improving dividend stream and gradual enhancement of corporate governance.” They recommend buying Gazprom’s preferred shares, which closed May at $4.13, maintaining a price objective of $4.90. The researchers have, meanwhile, gone bearish on Uralkali, a Russian potash fertilizer manufacturer whose industry is facing structural excess capacity in global production, the team leader says. They cite in addition the July break-up of Uralkali’s partnership with Belarusian state-owned Belaruskali, resulting in the disintegration of their export cartel, as well as commodities prices that are softening and trading in the “lower part of their three-year range,” Zabotkin notes. The VTB crew advises selling Uralkali’s global despositary receipts, foreseeing a 10.4 percent downside to their late May trading value of $22.32.