Bloomberg News

Aberdeen Stays Underweight Russia as Oil, Gas Dependence Remains

July 16, 2012

Aberdeen Asset Management Ltd. will stay underweight on the Russian market because corporate governance improvements are slow and the country is too reliant on oil and gas.

“Most other emerging markets have made significant progress in corporate governance for the past 10 years, it’s probably fair to say that Russia has made less progress,” Peter Taylor, who oversees $1.5 billion in Russian equities as senior investment manager at Aberdeen, said in a phone interview on July 13. “We still have a long way to go.”

Russian equities trade at the cheapest valuations among 21 emerging markets tracked by Bloomberg, reflecting concern that the country, which relies on energy sales for about half of government revenue, is too reliant on commodity prices. Moscow’s Micex Index (INDEXCF) trades at 5.2 times estimated earnings, about half the valuation of shares in the MSCI Emerging Markets Index, data compiled by Bloomberg show.

Aberdeen is investing in Russian consumer stocks, like Russia’s largest food retailer OAO Magnit, supermarket chain O’Key Group SA and OAO Synergy, the Russian vodka maker, Taylor said.

To contact the reporter on this story: Ksenia Galouchko in Moscow at

To contact the editor responsible for this story: Gavin Serkin at

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