Hedge funds betting on Russian ruble

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http://www.bloomberg.com/news/articles/2016-04-10/stone-harbor-to-landesbank-buying-ruble-as-rebound-trails-crude

Managers of some of the best-performing funds from Berlin to New York are buying Russian ruble assets as the currency has rebounded 23 percent from a record low.

Stuart Sclater-Booth, who helps oversee more than $40 billion at Stone Harbor Investment Partners, turned overweight on the ruble in mid-February and is betting it will appreciate to as much as 63 per dollar, which would be a 6.2 percent gain from Friday’s closing level. Lutz Roehmyer, who helps manage $12 billion at Landesbank Berlin Investment GmbH, said he adds ruble assets to his portfolio almost every day.

The fund managers are joined by strategists from Goldman Sachs Group Inc. to JPMorgan Chase & Co. who increased their ruble forecasts in March. The more bullish outlook is based on the idea that oil prices, which largely influence Russian markets, have stabilized after falling about 60 percent from last year’s high. While the ruble has risen the most in emerging markets since its record low in January, it has rebounded a little more than half as much as Brent crude, encouraging bets that the currency’s rally will continue.

“We think Russia will offer attractive return potential for the rest of the year,” Sclater-Booth said by phone from New York last week. “You have tremendous carry in the ruble, we think oil found a bottom earlier this year and the central bank, we think, is going to be successful in bringing inflation down.”

The New York-based money manager, who was formerly the head of emerging-markets strategy at Goldman Sachs Group Inc., has a bigger exposure to Russia than benchmark indexes. The $1.54 billion Stone Harbor Emerging Market Debt Fund outperformed 72 percent of its peers in 2015, according to data compiled by Bloomberg.

Gross domestic product in Russia, the world’s largest energy exporter, has contracted in each quarter since the period ended in March 2015 and isn’t forecast to resume expansion until the start of next year. International sanctions linked to the Ukraine conflict have exacerbated the impact of slumping commodity prices, prompting some fund managers to avoid the country’s markets. The median estimate of 44 analysts surveyed by Bloomberg is for the ruble to depreciate by 6 percent by year-end.

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what goes down..can come up..and what goes up..usually comes down..ride the wave..the deliberate destruction or attempt to destroy the ruble has now made it very attractive..and all the reasons why the ruble were attacked originally are forgotten in a blur of greedy profit..

“We think Russia will offer attractive return potential for the rest of the year,” Sclater-Booth said by phone from New York last week. “You have tremendous carry in the ruble, we think oil found a bottom earlier this year and the central bank, we think, is going to be successful in bringing inflation down.”

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~ by seeker401 on April 14, 2016.

2 Responses to “Hedge funds betting on Russian ruble”

  1. I wish I had put 500 million into the ruble at its lowest – how many of those who crashed the ruble will have done that very thing .

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