Russia was cut to marketweight at Bank of America Merrill Lynch (BAC:US), which called the nation a “net loser” from the Cyprus bailout plan.
“While the rest of the world welcomes the Cypriot bailout, the major haircuts and freezing of deposits over 100,000 euros is clearly worse for Russia than the originally proposed Cypriot bailout,” Bank of America strategists said in an e-mailed note today.
Cypriot President Nicos Anastasiades agreed to shut the country’s second-largest bank under pressure from its euro partners. The Micex Index slumped 3.6 percent last week as Cyprus -- Russia’s biggest direct investor because of a dual tax-avoidance treaty -- proposed a levy on savings accounts that was later rejected by lawmakers. The revised accord spares bank accounts below the insured limit of 100,000 euros.
Bank of America could take a “more bullish” view on Russia in the second quarter, depending on the effect of the bailout, it said.
The analysts’ “favorite” global emerging market is Turkey, according to the note.
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