By Eric Jansson
The trouble is that this market cap is split between 10 bourses of greatly varying size. Warsaw, for example, posted €106.8 billion in equity market capitalization and Riga just €1.8 billion. While the growing EU aegis boosts access to equity in the region and limits perceived risk, investors must still pick through a highly fragmented trading environment in order to identify good buys.
A bigger target is Russia, so many emerging Europe investors head there, treating the space between Frankfurt and Moscow as fly-over territory. “We’ve had an extended commodities cycle. We have a high oil price. Russia’s the relatively low risk destination in some ways. Why not buy a Russian company that’s pumping oil out of the ground at $70 a barrel? Why not?” asks Paul Tucker, senior European finance analyst at Merrill Lynch.
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