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Russia Assets Surmount Sanctions as Putin Comes in From the Cold

An easing of tensions between Vladimir Putin, Europe and the U.S. is prompting investors to take a fresh look at Russian assets.

Swedbank Robur in Stockholm bought shares in state-owned Russian companies and NN Investment Partners in The Hague said it was reconsidering its underweight stance on stocks after the Group of 20 summit brought Russia closer to an alliance with the U.S. in the fight against terrorism. Russian stocks rallied the most worldwide on Tuesday after Zambia and bonds gained on speculation the rapprochement would lead to an easing of sanctions over the Ukraine conflict.

“Russia is no longer seen as a villain like a year ago," said Elena Loven, who is adding "liquid and cheap" stocks to the 1 billion-euro ($1.07 billion) portfolio she helps manage at Swedbank Robur. "The political risk that was priced into Russian assets is declining. Foreigners, who were mostly underweight Russia, are now buying Russian blue chips in a panic."

Finding common ground with U.S. has the potential to change the stakes for investors who until now have been pricing in the risk that separatist turmoil in Ukraine’s easternmost region could flare up again and prolong sanctions. Standard & Poor’s said Tuesday that an easing of Russia’s isolation would warrant a...


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