On the week ending August 12 Russian assets saw about $40mn inflows from combined equity and bond fund flows versus $60mn outflows seen in the previous week, BCS Global Markets wrote on Augusts 14 citing EPFR Global data.

There has been a mild rally in recent weeks with the dollar denominated Russia Trading System (RTS) index clawing back much of its losses from the first quarter to break above the 1,300 level for the first time in months. The MOEX Russia index is back in the black having returned 0.7% YTD as of August 15.

While the oil & gas sector remains deeply in the red having lost 29% YTD, both the consumer stocks and metals & mining are both back in the black having returned 6% and 10% respectively as of August 15.

As followed by bne IntelliNews, during the previous weeks bonds have consistently outperformed equity, showing stronger inflow for both Russia-dedicated and combined funds.

On the equity side, Russia-dedicated funds posted $20mn outflow ($60mn outflow in the previous week), marking the sixth consecutive week of outflows, while combined funds showed minor inflow for the first week (versus $90mn outflow in the previous week).

For bonds, Russia-dedicated funds saw a minor inflow, attracting funds for the eleventh week in a row, while combined funds drew $40mn in ($30mn inflow in the previous week), for the sixth week of inflow.

"Finally, we see the first week of net inflows into Russian stocks from combined global fund flows," BCS GM commented, while noting that "they were very minor, but it still was the best week since early June." For bonds, steady inflows continued. Rising US Treasury yields and falling gold prices also illustrate the rising appetite for risk on the markets, including Russian and EM debt, BCS GM analysts believe.