Emerging Markets

Russian Growth Slows to 3-Month Low, Export Continues to Fall, Inflation hits 43-month high: HSBC

HSBC-RussiaHSBC Russia PMI October 2014Following the latest October Markit report “the Russian manufacturing sector continued to register growth of output at the start of the fourth quarter, according to HSBC PMI® data compiled by Markit. That said, expansion of new orders lost Momentum, and firms continued to cut staffing levels. New export business remained a major drag on total new order growth, falling sharply since September. The latest survey results also signaled an intensification of inflationary pressures in the goods-producing sector, linked to the weakening ruble.

The survey’s headline figure is the HSBC Purchasing Managers’ Index™ (PMI) – a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy. The PMI remained above 50.0 for the fourth month running in October, indicating an improvement in overall business conditions at Russian manufacturers. That said, the PMI edged lower to 50.3, signalling only a fractional rate of improvement. In comparison, the headline figure has trended at 51.8 since its inception in September 1997.

Manufacturing output in Russia expanded for the fifth month running in October, having previously declined continuously between January and May. The rate of expansion accelerated slightly, but remained modest overall. Production was supported by rising levels of new work in October. The current sequence of expansion now stretches to four months, although the pace of growth slowed in the latest period. New export business fell for the fourteenth consecutive month, and the rate of decline in October was the joint-second fastest over this period.”

Investors can access Russia stock market via three mainstream ETFs: Market Vectors Russia ETF (RSX), iShares MSCI Russia Capped ETF (ERUS) and SPDR S&P Russia ETF (RBL) [Generic Comparison Analysis of Three Mainstream Russian ETF’s (Iconographic)].

ETFs: RSX, ERUS, RBL, RSXJ

The full PMI report can be accessed from Markit.


Important Information Related to this Article

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