April was very positive due to recently started bull market in the commodity markets. Particularly the oil price, ending the month on $ 46 a barrel Brent Crude, has been pushing the Russian equity markets upwards (+8%). The rumour is in the markets that the price of steel is rising due to China’s efforts to increase the oil storage capacity. It looks like China believes that the oils price only showed a temporary correction.
An other important development for the Russian oil sector is the opening of its own futures market for Siberian oil. This type of oil trades with large discounts to other types of oil with the same quality due to it’s difficulty to trade. This problem seems to be solved now. This oil market is traded in Russian Rouble, leaving the US Dollar as the oil standard currency.
The stock markets of Turkey performed again in a good way (+3,5%). All negativity in the western press is not impressive at all to investors. We expect to see a continuation of the positive trend in Turkey. However new positive news of the economy is needed to keep up the pace.
Also India is keeping up some positivity (+1,5%). For India we see a strengthening of the trend what makes us to expect an acceleration of the upward movement.
China was less positive (-2,5%). This markets showed limited losses. During April 2016 negative news about the Chinese economy and trade worried investors. This together with doubts about the leverage level of the Chines economy slowed down the recovery of the Chinese equity markets.
The Eastern European stock markets faced a severe downturn of more than 5%. This makes that we highly likely will close this special position in the start of May.
We expect to see a continuation of the positive trend in Russia. Both Russia and Turkey are now in a long term upward trend. This is bolstering our confidence in this two markets in particular.