Asset Class Strategy: Valuations Remain Compelling

Eurozone recession, uncertainty over fiscal policy in the US and a hard landing scenario for China continue to overshadow Russia's economic growth outlook, and we forecast real GDP growth at 3.4% this year, keeping us below the Bloomberg median consensus forecast of 3.8%. With the global economy experiencing a slump and Brent crude struggling to break above US$100/bbl, we expect investors to proceed with caution with regard to Russian assets, even if we maintain that valuations for equities and fixed income remain attractive over the longer term.

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