Macro strategy for Russian banking stock exposure

Overview

The performance of the Central Bank of Russia and the Finance Ministry in fighting inflation has notably improved in 2011. If this counter-inflationary policy bias holds, all Russian asset valuations are likely to benefit from the resulting reduced volatility in the markets and the real economy, but the prime re-rating candidate will be the banking sector. In the contrary scenario of looser policy and higher inflation, banks would enjoy superior growth and margins in the short run but,...