After a dreadful first quarter, Russian equities followed an improved global sentiment as the liquidity pump kicked in around the world and spooked investors started to re-enter the market again. Russia benefited from a monster recovery in the oil price that saw price volatility that we have never seen before, helped by OPEC who finally agreed to cut nearly 10 million barrels a day to meet the drastic fall in demand.
Russia dipped into its National Wealth Fund benefiting from past savings in a time of need. Like many other economies, we saw rate cuts at the tune of 1.5%.
Russia instituted harsh measures to curve the spread of COVID-19 but started to ease up towards the end of the quarter. Another event that took place toward quarter-end was the “All-Russian vote” of 25th June, which was the referendum to reform the constitution of Russia, enabling President Putin to run again for president in 2024, allowing him to sit for another 12 years (6 year, two terms). If that were to happen, Putin would have been in charge for 36 years if we had to include the four years he was the Prime Minister instead.
The Fund currently has around 25% in cash, allowing the fund to benefit from any opportunities as they present themselves.
Domicile: Bermuda
Source: Bloomberg LP, AP Asset Management, Prosperity Capital Management