Investors and analysts interviewed by Bloomberg have called Russia and Brazil the best choices for investment among developing countries.
During the survey, 16 analysts gave the highest rank to the bonds and currencies of Russia and Brazil while China was ranked as the weakest.
According to the tables compiled by Bloomberg, the analysts gave Brazil’s bonds the most optimistic forecast, followed by Indonesia and Russia. Eight of the 16 analysts gave an optimistic forecast for the Russian rouble and ten experts expect a reduction in Russia’s key rate. The analysts gave the most optimistic forecast for the economies of India and Indonesia.
Two of the interviewed analysts gave Russia a strong forecast while nine gave Russia average forecast and another two analysts gave a weak forecast.
The analysts also assessed the political risks in developing countries. One expert believes they are high in Russia, three considered them average and nine said the risks were low. Most believed that the US Federal Reserve policy has a low impact on the movement of capital in Russia.
“Countries that represent improving fundamentals and offer high carry are likely to outperform, especially if they are still in the process of cutting interest rates,” said Jens Nystedt, a money manager at Morgan Stanley Investment Management.