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The 2014 Emerging EMEA Research Team: Emerging-Europe Equity Strategy, No. 1: Michael Harris & team
Michael Harrisand his team at Bank of America Merrill Lynch notch their second straight No. 1 finish on this lineup. The 44-year-old researcher also pilots crews that repeat in first place inCEEMEA Equity StrategyandTurkey Equity Strategy, and he again joins with Stephen Pettyfer in guiding thetop-ranked squad in Middle East & North Africa Equity Strategy. These analysts “have a great feeling for the market and can always be counted on to provide up-to-the-minute market intelligence,” remarks one portfolio manager. “They also seem more willing to express a negative view and make sell recommendations, which causes me to trust them a little more than the other guys.” In March, just after Russia annexed Crimea and as the crisis with the Ukraine continued to unfold, Harris and his colleagues advised investors to remain watchful for the time being. The U.S. and other Western countries were imposing costly sanctions on Russia, they noted, and questions remained over the possibility that the penalties would hit individual companies, given the proliferation of oligarch-owned businesses in the country. Until the situation was clear, money managers should exercise caution and await any further response from the West, particularly the U.S., they added, which is less dependent on Russia than its peers. At the same time, however, they noted that many stocks in Russia were undervalued and urged clients to focus on those names that were not facing significant debt-refinancing risk and whose business models were not vulnerable to sanctions. In addition, they should avoid companies with downside risk to a weak ruble and those that are sensitive to economic growth cycles. Preferred names include long-standing favorites Eurasia Drilling Co., an offshore and onshore services provider, and retail chain Magnit; as well as Internet search-engine operator Yandex. Investors with a higher tolerance for risk should consider energy plays Lukoil Oil Co. and Surgutneftegaz, telecommunications giant MegaFon, Sberbank of Russia and the country’s largest conglomerate, Sistema. In April, Harris decamped BofA Merrill for Renaissance Capital, where he is directing coverage of Turkey. |
