Hedge funds see upside in Russian equities

A strong economy and much-needed capital market reforms bode well for Russian equities. As they seek to capitalise, local hedge fund managers are looking beyond the usual natural resources plays.

Hedge funds in Russia are increasingly bullish on domestic equities, with many favouring consumer stocks over the oil and gas companies that dominate the local market.

The scene is set for the Russian economy to experience strong growth over the next year and beyond. GDP is expected to increase and hedge fund managers predict the equity market will see as much as a 50% upside during 2012.

However, Russia’s path to success and stability has not been smooth. The Russian stockmarket had a rough ride