Along with oil prices plunged, the ruble collapsed and gloomy economic outlook. Stock markets (equities) Russia is classified as cheap market in the world today, according to research by This Is Money.
Rating based on 3 This Is Money valuation major investment, abbreviated as CAPE, FY1 PE and PTB. In particular, the ratio CAPE price / earnings per cycle. This ratio is calculated by dividing the market price (stock) divided by the average profit of the company in the market that generated in a certain time period, here is 10 years. FY1 PE ratio is the share price / revenue forecast over the next one year.
PTB stands for “price-to-book”, is the ratio of stock market price / book value. From these three major indexes, This Is Money given percentage score for each market, the market does have the higher the score the more expensive and vice versa. Accordingly, the US stock market is considered the most expensive, with 105 points.
According to Bloomberg, RTS Index indicator of the Russian stock market has plunged 44% this year. As of December 17-11, the stock market capitalization Russia (531 billion dollars) is not equal to the market value of one US company is Apple (669 billion dollars).
11-12 days, Russia had to raise interest rates since the early 5th this year to save the ruble, from 9.5% to 10.5% / year. However, even after raising interest rates declared by the Central Bank of Russia , the ruble fell to the lowest level ever in history against the dollar, to convert 1 USD 55.46 rubles, 40% lower than the first year.
The move to raise interest rates this comes just one week after Russian President Vladimir Putin requires the central bank and government to coordinate the implementation of strong measures to punish speculators and stabilize the currency market . In addition to raising interest rates, the Russian Central Bank has spent about $ 80 billion to buy rubles to keep the price of the currency.
This makes the foreign exchange reserves of Moscow plummeted 20% since the beginning of the year, while 416.2 billion, larger than many countries. However, according to the Economist, there are 170 billion of these are located in the second largest endowment fund reserves (89 billion USD) and the National Property Fund (82 billion dollars), but the money in the fund 2 hard can be drawn in a short time.
Some argue that the assets of the National Fund assets financed mostly used for long-term infrastructure projects should not have liquidity.Meanwhile, the Reserve money to buy assets mainly in the capital of the Russian state-owned banks, the liquidity is very poor. According to economists Anders Aslund of the Peterson Institute for International Economics, the availability of foreign exchange reserves of Russia today is only about $ 203 billion.
11-12 In a statement, the Russian Central Bank forecasts the economy will grow at close to 0% in the years 2015-2016 and inflation will be around 10% in the first 3 months after. Last month, the consumer price index (CPI) rose 9% of Russia over the same period last year, the most since 6/2011.
The objective of the Central Bank of Russia is the reduction of the threshold of 4% inflation over the medium term. The government is in talks with major companies on the sale of foreign currency businesses.Besides, Moscow also urged exporters conversion of foreign currency into rubles to support the currency exchange rate.
According currency strategist at Bank Rabobank Piotr Matys, the decision to raise interest rates 11-12 “is not enough to stabilize the ruble exchange rate and increases the risk of a currency crisis comprehensive”.
This is dummy text. It is not meant to be read. Accordingly, it is difficult to figure out when to end it. But then, this is dummy text. It is not meant to be read. Period.