LONDON, Sept 22 (Reuters) - U.S. fund giant Franklin Templeton has become one of the first major global investors to support selectively buying back into Russian stocks, arguing the recent sharp sell-off had gone too far.
The crisis with Ukraine and the subsequent international sanctions have seen dollar-denominated Russian stocks lose almost 20 percent this year.
Bank of America Merrill Lynch’s investor survey this month also showed that Russia was currently the biggest underweight position in emerging markets.
Tucker Scott, Portfolio Manager and Executive Vice President of Templeton’s Global Equity Group, however, said the slump in prices may have been overdone and probably wasn’t justified by the real-economy impact of the troubles.
“We believe now may be a fair time to revisit investing in Russian equities,” Scott said in a blog posted on Monday.
“We have found that in some cases, share prices of Russian companies have declined in value so far that much of the news regarding the Ukraine conflict was already discounted, and subsequent geopolitical developments haven’t created additional market aftershocks.”
He added that Russian stocks had recently reached the point where on a ‘price-to-book’ basis (the share price versus the price of all its separate parts) they were their cheapest in more than a decade. Healthy dividends also boosted their appeal.
for full post click: here Reporting by Marc Jones; Editing by Toby Chopra