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Russia Stocks Have Upside, Many Investors Still UW: VTB Capital

13 October 2016
“A lot of the accounts still appear to be underweight Russia, but are looking more actively to increase their exposure,” Mark Richardson, global head of equities at VTB Capital, says in interview in Moscow.

Russia stocks have “good value” vs other EM markets. Expects Russia equity deals before year-end, early 2017; has “healthy” pipeline. Has hired senior staff member for cash equities sales team, starts Nov. 3; declines to reveal name.

“This is the first time since 2014 where I feel confident enough to say that we may have seen the worst - I mean in terms of investor interest and exchange volumes”. Will continue to invest in electronic trading; isn’t looking at HFT: “It’s not a focus of ours and we’ll wait and see how that market develops following the recent regulatory scrutiny”. Will continue developing high-net-worth, institutional and corp. client base.

Hasn’t felt any impact from Brexit on business: “it’s just too early and it’s going to be a very long process.” On global equities side, has done transactions in India this year, which is strategic country for business; received domestic FPI license in India earlier this year. Will need to be aggressive on pricing to compete w/ local banks
Most international banks are less focused on EM right now because of “other more pressing issues”; this, along w/ drop in internal funding levels vs yr ago resulted in new business opportunity for VTB Capital in EM mkts outside of Russia.

VTB Capital

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