Svi pričaju ali nema konkretnih poteza. Ipak, jednom kad se situacija prelomi onda će ponovo doći do masovnog povratka ulagača i pored loše atmosfere i negativnih stvari koje su prisutne na domaćim i regionalnim berzama :
CEE is still undervalued compared to all other stock markets in the world 2010-10-12
October 12, 2010
During this time of the year we host our annual East Capital Seminars around the world. The seminars provide our investors with a picture of how we interpret the surrounding world and our view on Eastern Europe. Given that our investor base is international, the seminar tour takes about six weeks. In addition to our presentations we also hold a number of meetings with journalists in the countries we visit. One of the first journalists we met with quickly wrote an article with the heading "East Capital always says the same thing". He was disappointed that there was not a lot of new information in our presentation. However, the fact of the matter is that this is exactly what portfolio management is based on. It is important to work along the same path year after year to be able to identify incorrect pricing on the various markets that others may have missed. What part of our message is the same? Well, in brief, that Eastern Europe is still undervalued compared to all other stock markets in the world. This has been the case for many years and those who have previously met us will have heard this message before. There is nothing else to say when the valuation for Russia in comparison with other BRIC countries is as follows: In addition, we find it even more interesting when there is extensive data showing that this should not be the case. Take for example the bond market's view on Russia. The spreads demanded by the market for investing in Russian bonds are lower in Russia than in other emerging markets. This is most clear perhaps in the price differentiation of CDS; Russia has 166 points compared to emerging markets as a group with 241 points. (CDS, credit default swaps, the price of insuring bonds against the risk of default). For stocks the scenario for 2011 is the opposite since Russia is valued at a P/E ratio of 6.4 times the year's profit compared to double that for other Emerging Markets with P/E ratios of 11.7 times the year's profit! (Source: Bloomberg). In other words, it is not at all logical. But what is perhaps most exciting is that valuations in Russia are now the same as in 1999, which is to say directly after the Russian crisis! The good returns on the market have not come from increasing valuations, but from increasing corporate profits. In this respect, 2010 looks like it will be yet another good year for Russia. There is of course the general strong recovery to thank for this, but there are other factors that are playing a part, and it is not the natural resources companies that are seeing the strongest growth. By 2012, consumption and other domestic sectors are expected to post profit gains of almost 60%. Although Russia is at a "discount" compared to other emerging markets, the most important long-term driving force is nonetheless profit gains. It's important to remember this. So what have been the benefits of investing in these markets, and especially of investing via us? Since the start in 1998 our Russian fund has provided 24% annual returns and our Eastern European fund 23.4%. Our other daily traded funds have performed as follows throughout the years: Baltic, start 1998, annual return 15.7% Balkan, start 2004, annual return 7.7% Turkish, start 2006, annual return 6.3%.
What is driving this development? It's these three factors:
• Convergence and catch-up with rich EU countries
• Consumption in a growing middle class
• Commodities
