japanjp
Putin gearing up for 2024

Putin gearing up for 2024

19-03-2018 | Emerging markets alert

Despite the political risks, Russia offers attractive investment opportunities. Putin's re-election is not expected to lead to radical reforms.

  • Rob Schellekens
    Rob
    Schellekens
    Portfolio manager

Speed read

  • Putin’s final term not expected to lead to radical reforms
  • Non-commodity exports and healthcare spending may be increased
  • Despite political risks, we overweight Russia as all other lights are green

Over the weekend, to no one’s surprise, Vladimir Putin secured his 4th and final term as President, keeping him in power until 2024. With 99% of the votes counted Putin received 77% of the votes; a significant increase from the 63.6% he amassed in 2012. The voter turned out was 67% according to the official numbers, despite the calls for boycotts from the banned opposition parties. The election did not go without incidents, media reporting numerous cases of irregularities via ballot stuffing, forced voting and enticements.

最新の「インサイト」を読む
最新の「インサイト」を読む
配信登録

What now?

What can we expect, now that President Putin is in his (most likely) final term as President? Relations with the West are at a low, further exacerbated by the recent diplomatic confrontation between the UK and Russia over the poisoning of a former Russian spy on British soil.

We have long talked about the need for Russia to reform and diversify its economy away from oil. This being his final term, it would in theory be the perfect opportunity for Putin to push through some of these much needed difficult reforms, such as pension reform or spending cuts in security. However, any radical changes are not in our base case scenario, as we believe that Putin will want to implement gradual reforms to ensure social stability. If nevertheless they do materialize, they would be positive for the country’s fiscal health.

As per Putin’s State of the Nation speech, economic goals for the country are to modernize infrastructure, increase non-commodity export by almost 50%, and provide a stable energy network as well as a high- quality internet network. Labor productivity should be increased by 5% a year. From a wellbeing perspective demographics should be improved, life expectancy increased, poverty levels halved. The state is set to increase spending on healthcare and to improve the healthcare system.

Preparing for 2024

Another important question relates to the situation post 2024: who will take over the baton? We do not pretend to have a crystal ball allowing us to predict the future, but what we have seen is that over the last couple of years President Putin has been promoting and surrounding himself with a group of younger technocrats and business men. This is no coincidence. Putin seems to be preparing himself and Russia for the medium to longer term.

More changes from a political angle will materialize in the coming weeks, in the run-up to his inauguration in May. We expect that over this time a cabinet reshuffle should take place which could well give us a better glimpse into the political and economic future of Russia. One of the most interesting posts to look out for is that of the Prime Minister. One caveat is that the constitution could be altered, as we have seen in other countries, which would allow him to be President for life. This currently is not our base case scenario, and in recent interviews President Putin has hinted that this ought not to be the case.

Overweight Russia

Our fundamental Emerging Markets Equities strategies are overweight Russia. While we recognize the current political risks, we see tailwinds in the medium term as GDP growth recovers, underpinned by an improvement in domestic consumption and prudent fiscal and monetary policies. Russia boasts one of the lowest fiscal deficits in emerging markets, continues to have a current account surplus, and is currently experiencing record low inflation, which gives the Central bank ample room to continue cutting interest rates. Stabilizing oil prices provide additional support. Valuation remains attractive, as Russia is the cheapest emerging market and earnings revisions positive.

重要事項

当資料は情報提供を目的として、Robeco Institutional Asset Management B.V.が作成した英文資料、もしくはその英文資料をロベコ・ジャパン株式会社が翻訳したものです。資料中の個別の金融商品の売買の勧誘や推奨等を目的とするものではありません。記載された情報は十分信頼できるものであると考えておりますが、その正確性、完全性を保証するものではありません。意見や見通しはあくまで作成日における弊社の判断に基づくものであり、今後予告なしに変更されることがあります。運用状況、市場動向、意見等は、過去の一時点あるいは過去の一定期間についてのものであり、過去の実績は将来の運用成果を保証または示唆するものではありません。また、記載された投資方針・戦略等は全ての投資家の皆様に適合するとは限りません。当資料は法律、税務、会計面での助言の提供を意図するものではありません。

ご契約に際しては、必要に応じ専門家にご相談の上、最終的なご判断はお客様ご自身でなさるようお願い致します。

運用を行う資産の評価額は、組入有価証券等の価格、金融市場の相場や金利等の変動、及び組入有価証券の発行体の財務状況による信用力等の影響を受けて変動します。また、外貨建資産に投資する場合は為替変動の影響も受けます。運用によって生じた損益は、全て投資家の皆様に帰属します。したがって投資元本や一定の運用成果が保証されているものではなく、投資元本を上回る損失を被ることがあります。弊社が行う金融商品取引業に係る手数料または報酬は、締結される契約の種類や契約資産額により異なるため、当資料において記載せず別途ご提示させて頂く場合があります。具体的な手数料または報酬の金額・計算方法につきましては弊社担当者へお問合せください。

当資料及び記載されている情報、商品に関する権利は弊社に帰属します。したがって、弊社の書面による同意なくしてその全部もしくは一部を複製またはその他の方法で配布することはご遠慮ください。

商号等: ロベコ・ジャパン株式会社  金融商品取引業者 関東財務局長(金商)第2780号

加入協会: 一般社団法人 日本投資顧問業協会

本記事に関連するテーマ: