Few emerging markets were hit by the new SARS coronavirus as hard as Russia. The good news is that it’s approaching peak, the World Health Organization says.
According to the WHO, the increase in fresh cases of the coronavirus in Russia since May 6 fell below the daily rise of more than 7% and is now rising by 5.5%. Russia has 209,688 confirmed cases of the SARS coronavirus 2, the most infected emerging market of them all. Brazil is next with 156,862 cases.
“There are still cases of the disease, but the growth rate is stabilizing. We really hope we are looking at the last few days of the coronavirus and that the increase in the incidence rate has plateaued,” WHO Russia spokeswoman Melita Vujnovich was quoted saying in the press this weekend.
Russia is now the fifth most infected country by the coronavirus and is gaining on the Italy and the U.S. More people have contracted the virus in Russia than in France and Germany.
Russia is the only country in the top 10 that has a mortality rate of 1%. Though this level is expected to rise in the next two weeks as those hospitalized in ICU units could fail in the days ahead.
Russian leader Vladimir Putin will meet with cabinet officials today to discuss whether to extend national quarantine orders. Putin shut the country down in April, but called for everyone to still be paid their salaries. Moscow has lockdowns in place until May 31.
Some 81 billion rubles is being allocated to small and midsized businesses in Russia similar to the U.S. payroll protection plan and other Small Business Association one-time grants for emergency funding of businesses forced to shut down to slow the spread of the coronavirus.
From a market perspective, Russia is still in a bear market. The VanEck Russia (RSX) exchange traded fund is down 27% from its 12 month high reached on January 21. Year-to-date, RSX is down 22.4%, underperforming its peers in the MSCI Emerging Markets Index.
Some of its biggest companies are selling at bargain basement prices. Yandex YNDX -1.1% (YNDX), known primarily for its search engine but also known as the Russian Uber, trades at just 9 times earnings while Google GOOGL +0.4% trades at 28 times.
“There are some good names to buy in Russia at these discounts,” says Arent Thijsen, a fund manager at Blauwtulp Wealth Management in The Netherlands. “We’re adding Yandex in the crisis.”