Goldman Sachs. North Korea. Russia.
It sounds like a conspiracy theorist’s dream, but after placing a big fat (albeit theoretical) ‘buy‘ on North Korea on Monday, the investment bank has on Tuesday, followed up with a bullish note on the Russian economy.
Here’s their thinking:
Most Russian companies have already reported their 2Q numbers and outlook statements. On the surface these results do not look great. On average, US$-denominated EBITDA is down 55%, but these numbers still managed to beat very depressed expectations across the board. Moreover, in our view these results and especially management commentary and outlooks have provided the first glimpse of the economy emerging from the crisis.
…
Judging by the companies that have so far reported 1H2009 numbers, revenues in Russia fell by 40% yoy in US$ terms and EBITDA by 55%. A significant part of this performance was currency-related — the ruble depreciated by 25% on average over the period; however, underlying declines in business activity broadly followed the 1H2009 real GDP decline of 9.5%.
We expect a significant pick-up in revenues in 2H relative to 1H of this year – with more than 20% sequential growth in US$ terms. We are still using a US$60 average oil price for the year in our models, so the actual increase in revenues could be more substantial. This will be driven in part by seasonality, in part by higher commodity prices and also by a general improvement in Russian macroeconomic conditions.
And just to better illustrate that recovery, sector by sector, the GS analysts have thrown in the following charts:
Vodka, all around then.
Related links:
North Korea: `Buy’ – FT Alphaville
Russia’s matryoshka banks – FT Alphaville
Dmitry Medvedev: Russian bear – FT Alphaville
Who’s for seconds? – FT