Monday 28th July 2014

Accessing Russia 2013

FRIDAY ANALYSTS TICKER: July 25th 2014 - According to Adam Cordery, global head of European fixed income, Santander Asset Management, and fund manager for the Santander Euro Corporate Short Term and Euro Corporate bond funds, “Pricing of risk assets doesn’t offer much of a margin for error at the moment. And now Europe is starting to go on holiday, market liquidity may get poorer than normal, and any buys today may well have to be holds until September. It is always interesting to note what yields are required to attract clients to financial products. Twenty years ago, bond funds offering yields of 10%+ could generally attract lots of client interest very quickly. However as rates have come down over the years, so the yields clients demand have fallen. Now 4% seems to be the new 10%, he say. Cordery thinks that unfortunately, investors often want today the yield/risk mix that was available last year, so the products that get launched, sold and bought in size may be more risky than people think. “Products with 4% yield will sell well today, but to get to a 4% yield in Euro you need to invest in a portfolio with an average rating of single-B, and that is far from being risk-free. I get the impression the conventional wisdom today is to think that interest rates must surely go up soon and the main risk to bond portfolios is an increase in bund yields. Because of this many investors are buying short-duration products and floating rate notes, perhaps viewing them as a safe choice, almost like cash. It is possible however that these products may yet prove to have a considerable sensitivity to changes in credit market spreads and/or bond market liquidity, and may prove to be no protection at all.” - Commenting on the RBS share price jump, Dr Pete Hahn of Cass Business School, says “It's hard to tell whether the RBS share price jump today is more about relief or optimism. The former is about fewer fines, fewer losses on loans, and fewer costs in a shrinking business and possibly dividends for shareholders. And there's the rub, owning shares (as opposed to interest bearing debt) should be about optimism and long-term growth in dividends. But from a shrinking business? Few would argue that RBS' retail and corporate bank had efficiencies to be gained and cash flow that might be converted to dividends; yet like most banks, RBS' cost of equity remains stubbornly and appropriately above its ability to provide a return on that equity. For shareholders, current improvements should mean dividends in the medium term but a recognition that RBS may lack any merit for new investment and delivering any long-term dividend growth - not good. While many large retail banks are getting safer, in some aspects, and we often speak of them in terms of moving toward utility type models, banks take risks, are cyclical, face competition, have new business challengers, and are simply are not utilities. Investors shouldn't get ahead of themselves here.” - According to the monthly survey held by the central bank of Turkey, the country’s capacity utilization (CU) rate declined slightly to 74.9% in July from 75.3% in June. Meanwhile, seasonally adjusted (SA) CU also declined to 74.3% from 74.7% in June, writes Mehmet Besimoglu at Oyak Yatirim Research. As for manufacturing confidence, the index declined to 109 from 110.7 in May. On SA basis, the index also edged down slightly to 106.4 from 107.2. SA capacity utilisation was broadly stable in 1H14, averaging at 74.7%. This is the same level with the 2013 average. Despite the political turmoil and volatility in financial markets, activity has been relatively resilient. Export recovery & government spending supported production in 1H. Following the elections, public spending relatively decelerated. The turmoil in Iraq also decelerated export recovery from June. Nevertheless, we still expect 3.5% GDP growth in 2014, writes Besimoglu.



Stuart Adams, FPL EMEA Regional Director


Stuart Adams has been the FIX Protocol EMEA Regional Director since March 2009.  Working closely with members, exchanges, ECNs and regulators across the region, Mr. Adams is responsible for building stronger relationships with this market sector and generating a greater understanding of how the FIX Protocol may be used to increase market efficiency.  Mr. Adams has worked in the financial technology sector for more than 20 years, most recently as Head of European Operations at Portware, where he was responsible for setting up the firm’s London office and developing senior industry relationships to establish the business in Europe.  Prior to this, Mr. Adams undertook a number of different assignments including the position of Managing Director of AKJ, a technology solutions provider for the hedge fund and asset management community, SEO of Brut ECN Europe and Institutional Sales Director for Instinet Global Services.  In addition to his current position at FPL, Mr. Adams continues to work as an independent consultant within the financial services industry.


Serge Alexandre, Electronic Trading Sales,Otkritie Capital

Serge Alexandre

Serge Alexandre is leading the Electronic Trading Sales effort at Otkritie Securities Ltd, the most active brokerage company for on exchange traded Russian instruments, and is involved in designing new products to keep OSL ahead of curve and provide an easy access to the Russian markets to international clients.

Prior to joining OSL, Serge spent 5 years at Jefferies International Ltd, building and marketing the DMA, trading algorithms and PT platform, and 4 years at Sungard Financial system, working on market access for sell-side and high frequency trading firms.


Ms Ekaterina Anthony, Global Business Director, OJSC MICEX-RTS

Ekaterina AnthonyEkaterina Anthony (Troshinkina) was born in 1974, Ekaterina is an Economics graduate from the Russian Institute of Light Textile Industry. She also holds an MBA in finance management from California State University. From 2001 to 2004, she was in charge of energy consultancy projects at the energy consulting firm RPI, Inc. Before joining RTS Ekaterina was responsible for a division of The McGraw-Hill Companies in Russia. As of 2009 Ekaterina has fulfilled the Global Business Director role for RTS Exchange. She now has full responsibility for representing the interests of the newly merged Russian Stock Exchange Micex-RTS. Working with both buy and sell sides across Europe, she sees her focus as rendering the Russian Stock Markets more accessible for international investors by implementing the frameworks which are necessary for full market participation.


Kevin Dougherty, Founder KDGF Asset Management

Kevin Dougherty

Kevin Dougherty is the founder of KDGF Asset Management, an Emerging and Frontier Market Hedge Fund group that targets superior absolute returns in all market conditions. Kevin has 15 years experience in EM capital markets. Prior to founding KDGF Asset Management, Kevin was Portfolio Manager at Pharos Financial Group and managed three funds: the Pharos Russia Fund, Pharos Small Cap Fund, and Pharos Gas Investment Fund. During the 3 years that Kevin managed the Pharos Funds, he greatly outperformed the benchmark index: the Pharos Russia Fund returning +13% vs. a negative 33% return for the MSCI Russia Index, for an outperformance of 46%. Volatility of the funds was a fraction of the market, and the funds were also highly uncorrelated with the benchmark index (Pharos Russia Fund had an r-squared of 0.23 with the MSCI Russia Index). During that time, Pharos was awarded "Best Hedge Fund Manager" at the Hedge Funds World Middle East conference in March 2010. Prior to joining Pharos, Kevin was a Director of Emerging Market Equities at Deutsche Bank in London. He began working in EM capital markets at United Financial Group in Moscow in 1997. Kevin is a graduate of the University of California, Los Angeles.


Johan Elmquist, Portfolio manager/Partner, Tundra Fonder AB

Johan Elmquist

Johan Elmquist is equity portfolio manager and co-founder of Tundra Fonder, a fund manager specialising in emerging markets. Tundra Fonder has currently three funds, Pakistan, Russia and GEM AGRI&Food. Johan joined Alfred Berg, a leading Nordic Investment Bank, in 1991 where he worked as an equity analyst. In 1995 he was involved in launching Alfred Berg’s operations in Russia and moved to Moscow, he launched the first onshore Russia funds in 1997 also for Alfred berg. Johan has also worked at KPMG, T.Rowe Price and HQ Bank. Most recently since 2007, before launching Tundra Fonder, he was managing the four Russian equity Funds at Swedbank Robur amounting to USD 2bn.


Chris French, Business Development Manager, London Stock Exchange's Equities & Derivatives

Chris FrenchChris French is as a Business Development Manager at London Stock Exchange's Equities & Derivatives business specialising in Russian and emerging market products. Specifically, Chris works on the product and business development of the IOB derivatives products offered through Turquoise Derivatives, formally EDX.

Prior to this Chris worked as an Exchange Broker on the MPS (Marketplace Service) Desk for Turquoise Derivatives which is a leading international gateway to Russian derivatives markets facilitating trading between Russian domestic and international counterparties. In this role, Chris provided execution services; dealing directly with the sales, trading and broking participants. He previously held positions in both the Operations and Surveillance functions of EDX.

Chris joined the London Stock Exchange in October 2007 as part of the Professional Development Programme. Chris studied Economics at the University of Newcastle upon Tyne.


Dr. Pinar Emirdag, manager at London Stock Exchange's Business Development team

Dr. Pinar EmirdagDr. Pinar Emirdag is responsible for managing London Stock Exchange's Business Development team with a specific focus on sales and marketing to institutional brokers, liquidity providers and new clients for the Group's cash and derivatives markets.

Pinar joined London Stock Exchange Group from ICAP where she was a Managing Director, responsible for Equities Business Development. She previously held a similar role at Liquidnet and prior to that was at Citigroup, where she was Director of Global Business Development at Citi's Electronic Trading business. Pinar was a founding member of The Board of Directors on platforms, Turquoise and BOAT. Prior to moving to London in June 2006, Pinar was Head of Strategy at Lava Trading, a subsidiary of Citi since August 2004, where she had responsibility for corporate, product and sales strategies. Pinar started her business career at specialist financial services management consultancy, Oliver Wyman. Pinar holds a Ph.D in Physics and a M. Sc. in Electrical Engineering from Brown University.


Tatyana Frolova, Head of Electronic Trading Department, Aton

Tatyana Frolova - AtonSince 2010 Tatyana has led the development of Direct Market Access (DMA) to global markets for institutional and private investors at ATON. Previously, from 2008, Tatyana performed a similar role at UniCredit Securities within the department of DMA Brokerage & Electronic Execution - a global division of UniCredit Group. Tatyana joined UniCredit Securities from ATON Capital, which sold its institutional business to UniCredit. Tatyana first joined ATON Capital in 2006. She is a member of the Stock Market Committee of the MICEX-RTS Exchange. Having graduated from MIFL , Tatyana is currently completing an MBA programme at the National Research University of the Higher School of Economics, Moscow.


Rebecca Healey, Senior Analyst, Tabb Group

Rebecca Healey

Rebecca joined TABB Group in March 2011, bringing more than 15 years’ experience in e-trading and financial services.  She has held various positions in sales and trading positions with Bankers Trust, Goldman Sachs and, most recently, Credit Suisse, where as vice president she was instrumental in launching the AES product to hedge funds from its inception in 2002 until 2008.  Prior to the AES launch, she was the first electronic trader at Credit Suisse to be registered for all electronic European Cash Equity Markets and covered sales trading into Asia and Europe from 1997 to 2000. More recently, based in the Middle East from 2008 to 2010, Rebecca was employed by the British Embassy in Bahrain where she successfully launched the UK Government’s Financial Services strategy and set up the Bahrain Financial Services roundtable that remains a key source of information for the UK Government today, especially in relation to Islamic Finance. Rebecca holds a Bachelor of Arts degree from University College London, majoring in Spanish and Latin American history and politics.


Tom Mundy, Chief Strategist, Otkritie Capital

Tom Mundy

Tom Mundy joined OTKRITIE as chief strategist in October 2010. Tom started his career with Wood Mackenzie in London as an oil analyst, before moving to Moscow to join Wermuth Asset Management GmbH, a leading Russian hedge fund. He then moved to Renaissance Capital as Russia and CIS strategist where the strategy team was consistently top ranked by both Institutional Investor and Thomson Reuters Extel. Tom has also provided informal analysis to the governments of both Russia and Kazakhstan and is a regular TV commentator on Russian affairs. Tom has an undergraduate degree in Russian from the School of Slavonic and East European Studies (University College London) and a postgraduate degree in Russian Studies, with a specialization on the Soviet military and perestroika from St Antony’s College (Oxford University).


Karen Papoyan, Director of Risk Management & International Relations at DCC, in charge of the Communications Office of the Integration of NSD and DCC

Karen PapoyanKaren Papoyan is Director of Risk Management & International Relations at DCC, and has been recently appointed as the person in charge of the Communications Office of the Integration of NSD and DCC.

Prior to joining DCC in 2010, Karen had an over a decade-long experience at UBS Investment Bank in Moscow where he was a Co-Head of Custody in 2006-2008, responsible for client service and relationship management. Karen started his career in 1997, when he joined a Russia-focused investment boutique Brunswick Securities which later created a joint-venture with Warburg Dillon Read and eventually became a Moscow investment banking arm of UBS. During his tenure at UBS, Karen acted as the main point of contact for international clients liaising with the regional managers in London and Zurich.


Peter Rowe, Director of International Sales, Electronic Trading Group, Renaissance Capital, London

Peter Rowe

Peter Rowe is Director of International Sales for the Electronic Trading Group at Renaissance Capital in London. Renaissance Capital is the largest investment bank in Russia and the CIS and is recognised as the market leader in Russia, the Emerging Markets of Eastern Europe and sub-Saharan Africa. The Electronic Trading Group at Renaissance Capital offers clients state of the art, low latency access to the Moscow based MICEX RTS exchange and the International Order Book of the London Stock Exchange. Renaissance Capital also provides the full suite of Prime Brokerage services to support these services. Peter Rowe is responsible for building the ETG franchise in Europe and North America, a role which draws upon his extensive experience in electronic trading garnered over the previous 10 years from working for the NYSE Euronext, Tibra Capital and Instinet.


Sergey Shelyagin, Head of Technology product and Services, OJSC MICEX-RTS

Sergey ShelyaginSergey Shelaygin graduated from the Belorussian State University of Computer Science and Electronics. He began his career in 1994 with the software solutions provider SAM-Solutions Ltd. and spent 8 years on various positions, in Software Engineering, Project and Product management, Account Management and the position of Managing Director of German and Swiss Insurance Institutions Relations. From 2002 to 2006 he held the position of Vice-President of Deutsche Bank having managed IT activities focused on mission critical IT applications in Equity Derivatives domain. Mr. Shelyagin’s diverse experience and broad technology background have proven to be invaluable for creating the Financial Competence Center within EPAM Systems which became a Global Provider of Solutions and Services to Global Financial Leaders and within CQG Inc. where he was responsible for Business Development. Sergey joined MICEX-RTS in March 2012 just after the merger of the two major Russian stock exchanges as Head of Technology product and services to bring a strong background in strategic planning, business development and technology.


Rachel Ziemba, Director of Emerging Europe, the Middle East and Africa and global macroeconomic issues, Roubini Global Economics

Rachel ZiembaRachel Ziemba is director of Emerging Europe, the Middle East and Africa and global macroeconomic issues at Roubini Global Economics. She has a particular interest in the macroeconomics of oil-exporting nations, including the management of oil wealth and energy-sector supply risks. She also does extensive work on global macroeconomic issues, particularly foreign-exchange reserve accumulation, sovereign-wealth management and economic imbalances. Prior to joining RGE, Rachel worked for the Canadian International Development Agency in Cairo, Egypt, and the International Development Research Centre in Ottawa, Canada. Rachel has served as an expert commentator for Bloomberg, CNBC, the Financial Times, the Wall Street Journal and other media outlets, and her research has been cited by the Economist and in papers from the IMF, World Bank, European Central Bank and U.S. Federal Reserve. She holds a bachelor's degree from the University of Chicago with honors, and a Master of Philosophy degree in international relations with a specialization in international political economy from St. Antony's College, Oxford University. She is the co-author of "Scenarios for Risk Management and Global Investment Strategies" (with William T. Ziemba), published by Wiley in January 2008.

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