Not wanting to humiliate Prime Minister Putin in the days after announcing his plans to run for the presidency, Russian traders are buying up cheap stocks in a rash of “patriotic buying,” according to market analysts.
Julian Rimmer, a trader of Russian equities at CF Global Trading in London, told Bloomberg News he believes that Russian investors with ties to Putin are buying shares to support the market following the prime minister’s presidency announcement:
I suspect that there are some ‘patriotic elements’ related to the state which are encouraged to buy certain stocks because having the Russian equity market open down three percent on the announcement of Putin’s presidential candidature was embarrassing.
Russia’s benchmark Micex index dropped 12 percent last week but rebounded slightly and rose 1.5 percent to close out the day, erasing an earlier loss of 3.6 percent. The Micex has fallen 20 percent this year, while the S&P has fallen only 7.5 percent over the same period.
