Cheap Russian Stocks ‘Wise’ Investment, Finland’s Pohjola Says

Russian and Asian equities are set to outperform next year as the global economic rebound seen this year continues, according to Pohjola Bank Oyj, the Finnish lender that provides a third of the country’s loans.

“We really like equities, especially Russia, which should see at least double-digit gains, led by domestic growth in the banks, construction and retail industries,” Ari Makinen, head of tactical asset allocation at Pohjola Asset Management, which oversees $46 billion in assets, said in a phone interview from Helsinki yesterday. “The valuation is too low in many of these companies. It should be a wise investment.”

Russia’s Micex Index has gained 21 percent so far this year, compared with the MSCI Emerging Markets Index’s 13 percent gain. The Micex has an expected price-to-earnings ratio of 8.25, while the MSCI EM has a 13.24 ratio.

Stocks in fast-growing Asian economies should also gain as they are “under-invested,” Makinen said.

“We like stocks that have exposure to global growth and don’t like fixed income, especially U.S. and European bonds,” he said.

To contact the reporter on this story: Adam Ewing in Stockholm at

To contact the editor responsible for this story: David Merritt at

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