Analysts have raised their 12-month profit projections for members of the MICEX Index by 5 per cent, according to Bloomberg. They now stand at 281 RUB a share as of April 13, 2016. Projections had slumped by 9.9 per cent at the same time last year.
“We expect to see earnings upgrades,” said Anna Vaananen of Credit Suisse Asset Management. “Undervalued equities are similar to having money in your pocket."
Although the MICEX Index has increased by 9.85% in 2016, Russia’s equities are still among the cheapest in the world. The average P/E of MICEX-listed companies stands at 6.9, 43 per cent less than that of the MSCI Emerging Markets Index.
“We have to recognize that the worst expectations for Russia’s political and economic system didn’t materialize and the chances of them materializing are now nil,” said Jack Arnoff of Elbrus Capital Partners. “The Russian market has potential to go higher from current levels.”
As of 12:17 GMT +3 April 20, the MICEX Index has gained 0.18% and reached 1933.62 points.