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Barings: Russian Commodities key in China’s bid for global supremacy

Wednesday, July 01, 2009 Share

Opalesque Industry Updates – Matthias Siller, fund manager of Baring Emerging Europe Plc at Baring Asset Management (Barings), suggests Russia’s huge commodities reserves mean it is best placed to supply the raw materials China needs in its bid to become a leading global economic power.

Matthias explains, “Governments around the world, China included, have launched massive economic stimulus packages in a mass attempt to avoid a depression. A significant proportion of these packages are allocated for infrastructure spending and this is particularly the case in China. Due to its high commodity reserves, we believe that Russia is going to play a critical role in China’s rapid industrialisation and urbanisation. Oil and gas aside, it is little known that Russia has approximately 40% of the global reserves of palladium, 28% of titanium, 17% of nickel and 8% of iron ore *.”

Siller continues, “Russia is currently the best performing equity market with the MSCI Russia 10-40 Index rising by 38.9% compared to 14.4% for the MSCI Emerging Europe 10-40 Index**. We believe the region presents significant investment opportunities for medium to long-term investors. The fact that we currently have just over half of the trust (56.4%) invested in Russian securities is a clear indication of our confidence in the region.”

As well as hard commodities, according to Barings, Russia is one of ...

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