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Emerging Markets: Where To Put Your Money With Russia At War

Opportunities still exist in Asia, away from the uncertainty of China - Financial Times

From the moment Russia’s tanks rolled across the Ukrainian border, the investment world changed. This is a war between two countries that mainly export commodities.

Russia is the world’s largest oil exporter — at the turn of the year it was producing 11.3mn barrels a day, according to the International Energy Agency. It was also the world’s biggest exporter of wheat. Ukraine is another major grain producer. It exported 48mn tons of corn and wheat last year, according to S&P Global’s estimates. Both countries share the same biggest market for their produce — China.

Even before the war in Ukraine, China was presenting difficulties for international investors. Just under a year ago I wrote explaining why my team had decided to sell all our fund’s Chinese investments. We had been monitoring how regulations had started to change in ways which might impede value creation for shareholders. We also noted that shareholders of the major technology companies — such as Alibaba and Tencent — were non-Chinese as the shares were listed outside the mainland and local investors could only invest locally. We were concerned this would lead to scrutiny from Beijing.

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