Russian Crises is an investment opportunity
I believe that the crisis creates a buying opportunity for Russian assets.
Before buying, everybody needs to establish, what the most likely result of the crises is. I volunteer below my view:
· First – a history lesson. This is the second military crises that Putin caused. First one was in 2008 in Georgia. The crises took 7 days to resolve – after three days from Russian forces arrival the French negotiated ceasefire, which took another 4 days to document and sign.
· During the nuclear disarmament negotiations West guaranteed Ukraine that its territory will remain unchanged. West therefore needs to act. If it does not, next time China will invade Taiwan etc.
· West does not want to fight with Russia. Nobody wins by bilateral sanctions.
· French today declared that the conflict does not change the relationship between France and Russia. I believe that French again will try to be the peace negotiators. I believe we will see French or other negotiators arriving in Moscow for talks soon. A face saving agreement will be reached, which could look like:
- Russia will not unilaterally assume the territory of Crimea
- Russian military stays in Crimea until the situation calms down
- There will be international monitors
- Ukraine will undertake to agree higher sovereignty for Crimea, if that is decided by the referendum
Once such arrangement is brokered, the Russian assets will rally back strongly. I believe that we are only days from this.