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Remember Russia is essentially a commodities economy. What will impact Russia more than sanctions is the current consumption rate of energy and other natural resources on a global and European basis. Also look to emerging market manufacturing growth for keys on the future slope for commodity prices.
Sanctions will have an impact on economic growth. Though there is little the global community can really do to Russia on a lasting basis, recent calls to reduce dependence on Russian exports by European Union members will have an impact. If you are buying Russia, you need to buy it based on assumption of slower growth rates.
Be prepared to take profits. Russia is one of the infamous BRIC countries and most strategists have a view, myself included, that BRIC countries are sure to slow as global growth slows. When the overreaction vanishes and valuations return to more normalized levels, that's when you need to carve some of the profit out of this position. You may believe in this country long term, but the short-term profit is what will likely be present for investors to harvest once the headline cease about Russian tanks.
I am not bullish long-term on the Russian economy. A slower-growth world, coupled with technology advances in alternative energy, will slow the Russian economy. Additionally, the level of corruption is so widespread that one wonders how much internal consumption has been soaked away by Russian companies and their chiefs.
But again, we are talking about capturing short-term opportunity. On the short-term, Russian equities have likely sold off more than they should have given current fundamentals and that's the opportunity provided to opportunistic investors amidst a frightening headlines.
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Fulll article : http://www.cnbc.com/id/101540552
Personal opinion:
The investment story in Russia is rather compelling. Several diversified funds such as RBL and RSX ETF may give some solid exposure to the country facing huge sanctions currently. The holding period should likely be more than one year and the commodities story for China is returning to its track.
In the meantime, hold on to your bullets. It likely be a bumpy ride till things are a little clearer (e.g. what the sanctions are specifically), whether there are more to come. What is the country doing to mitigate such issues.
