Maxim Korovin & team
VTB Capital
First-place appearances: 2

Total appearances: 4

Team debut: 2011

Rising one position to No. 2 are Maxim Korovin and his VTB Capital duo in Moscow, who “combine local expertise and sound understanding of the financial markets,” reports one fund manager. The strategists expect further deescalation of political tensions around Russia and thus forecast that the country’s sovereign credits will tighten against their emerging-markets peers. In April, New York–based ratings agency Standard & Poor’s reduced Russia’s debt from BBB to BBB–, one level above junk status, and even if more ratings downgrades are to come, they believe, spreads will remain relatively inexpensive. Beyond the government space, they see “a lot of very flat curves, which was probably justified by the recent volatility amid Ukraine’s political crisis, when cash price was more important than yield and spread levels,” Korovin says. “However, now with some normalization, midterm corporate bonds look attractive versus the longest end.” Similar opportunities exist in that segment of the Ukrainian market, the team leader advises, though Kazakhstan’s issues are “relatively rich.” These VTB researchers forecast that Russia’s central bank could launch a program of monetary easing, although not before the fourth quarter. A regulated tariffs freeze combined with a favorable base effect, they believe, will contribute to a disinflation trend in the second half of the year. At the same time, however, investors should be mindful of the “considerable upward risk for inflation amid a visible ruble depreciation year to date and some unexpected pressure in selected food items,” notes Korovin. Consequently, clients with higher risk tolerance are advised to sell front-end rates.