Santander on markets and the upcoming election in Russia

Jorge Fernandez Amman, Emerging Europe fund manager at Santander Asset Management comments on the prospects for Russian markets in the run-up to the Presidential election on 2 March.

“Russia has seen a rapid improvement in its political visibility. Last December, the Duma elections took place and Vladimir Putin´s party, United Russia, secured a constitutional majority in the new legislature, with 64 per cent of the votes. A month later, Putin announced his candidate for the Presidential elections. The choice, Dmitry Medvedev was what the market expected as he is perceived as the most pro-market of all the contenders.

“Polls for the elections on 2 March show almost 70 per cent approval for Mr Medvedev. This week, Vladimir Putin confirmed that he is willing to become prime minister when his presidential term expires.

“It is our view that investors are warm to the idea of Putin retaining some control after his presidency, as it should reduce uncertainly over potential personnel changes in the government and state-owned corporations, and thus ease remaining uncertainty over the upcoming political transition.

“Therefore, we think the announcement could provide a boost to Russian markets in the near term. Other factors that will support the Russian market are continuing solid economic growth and strong earnings momentum thanks to the high oil price.”