For once Russia has been an island of stability among the
turbulent global equity markets. While bourses in other countries
have been hit by jitters over the US economic slowdown and the
threat of default in Argentina and Turkey, Russia's stock market
has put in a solid performance, ending the first half of this year
as the third best performing market in the world. The Russian
Trading System (RTS) index has risen by more than half.
Until this year the RTS used to slavishly follow international
markets, with the Nasdaq dominating. But over the past six months
Russia has decoupled and is now being driven by a combination of
domestic investor sentiment, Russian companies hoovering up shares
as part of consolidation, and the modest reappearance of
international portfolio investors attracted by decent returns. High
international commodity prices and strong exports combined with
structural reforms have boosted confidence in Russian stocks.
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