The 2014 All-Russia Research Team: Fixed-Income Strategy, No. 2: Alexander Kudrin

After a year on top, Sberbank CIB’s Alexander Kudrin slips back to second place, the position he has held for five of the past six years. Indeed, Kudrin has become something of a fixture on this lineup, having earned an appearance every year since the All-Russia Research Team was introduced, in 2004. “Alexander has good ideas,” reports one fund manager, pointing to Kudrin’s November recommendation that clients buy Belarus sovereigns. Those credits were bringing a yield to maturity of 9 percent and trading at 98 to 100 percent of face value, a rate that the analyst reasoned “properly reflects the underlying risk.” By the end of May, they had climbed to 102 to 104 percent. In general, the analyst maintains a conservative outlook. “Chances for rates increases in the U.S. are relatively high,” he notes, so “there are high chances for yields in emerging markets to grow.” In addition, says Kudrin, “we don’t rule out certain deceleration of [top-line inflation]” in the third or fourth quarter of this year. Accordingly, he recommends that investors favor medium-term investment-grade Eurobonds and long-term ruble-denominated sovereign Russian bonds, or Obligatsyi Federal’novo Zaima.