Elena Shaftan has been adding to the Jupiter Emerging European Opportunities fund’s Russian positions on optimism in the country’s economy and political scene.
Shaftan says the “increased predictability of the political landscape”, caused by the proximity of elections and prime minister Vladimir Putin’s response to last year’s demonstrations, has bolstered her confidence in the Russian market.
In addition, the manager cites the accelerating growth of the Russian economy, combined with falling inflation and unemployment, as reasons for her optimism.
The manager has increased the £359m fund’s position in Russian vodka producer Synergy, a top 10 holding in the portfolio, after investors “over-reacted” to profits missing expectations because of one-off factors.
“It is still one of our favourite companies. We continue to believe in the company’s potential, as it delivered nearly 20% volume growth in the face of a declining market,” she explains.
Shaftan also added to Russian oil pump company HMS to capitalise on the high barriers to entry in its domestic market and a strong order book. (article continues below)
“Like many smaller companies, it has been ignored by the market in recent months, yet the company enjoys high margins thanks to its dominant position in its home market.”
Other moves in the Jupiter Emerging European Opportunities fund include the addition of commodity stocks in anticipation of higher commodity prices on the back of stronger global economic growth.
Russia will hold its presidential election on Sunday and Putin, who is widely expected to regain the presidency, has attempted to pull a positive message on the recent protests opposing his 12-years of power.
“That situation has helped make government structures more capable, has raised the need for them to think, search for solutions and communicate with the society,” the Associated Press quotes him as saying.