However, Russian equities are not that cheap any more… Despite all of the driving forces mentioned above still being in place, we highlight that Russian stocks are already not that cheap any more. The RTS index is currently market valued at 7 weighted average forward looking earnings, a level not seen since Aug'11, while a number of sectors like M&M, Consumers, Chemicals are already priced in line with historical average multiples.

… and the recently powerful catalysts do not look absolutely sustainable going forward. It is also important to note that the major catalysts that drove Russian equities in the past two months don't look sustainable in the longer run. Liquidity injections from the ECB are only easing the pressure on debt laden nations rather that solving the problem. Crude prices at above USD 120 bbl are creating a real risk to the economic recovery, especially considering the ongoing slowdown of emerging economies and the very vulnerable shape of the developed world. Investors who bet on Mr. Putin returning to the Kremlin are likely to be disappointed in the near future, as during his entire 12 year effective reign, the situation surrounding bureaucracy and state interventions into the economy has only become worse, and we don't see any reason that the situation could suddenly start changing for the better.

Eoin Treacy's view The Dollar denominated RTS Index fell abruptly during the August correction. It found support in October near the 2010 lows which is a characteristic shared by a number of markets. It has since rallied to break the eight-month progression of lower rally highs and pushed back above the 200-day MA. While somewhat overbought in the short-term a sustained move below 1500 would be required to question medium-term scope for additional upside.