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Browder sees upside in RTS


William Browder

The RTS, Russia's benchmark equity index, has soared 80% since September and is trading at levels last seen in the boom days before the 1998 crisis.

Bolstered by rebounding oil prices and fresh optimism about the global economic pick-up, the RTS has smashed through the psychological ceiling of 300, gaining 19% since the start of the year. It has outperformed all other emerging markets in the past 12 months.

William Browder, CEO of Hermitage Capital Management, believes plenty of upside remains. "The Russian equity market is the cheapest emerging market in the world, trading at a PE multiple of seven times earnings," he says. "At the same time, Russian bonds trade at a premium to other emerging markets. For the markets to reach an equilibrium, fixed income will either have to retreat or, more likely, equities will continue to rally."