Analyst Who Called Russia’s 1998 Crash Says Stock Outlook Is ‘Grim’

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Veteran Russia strategist John-Paul Smith has a warning for anyone looking to buy the nation’s stocks on the cheap after this week’s selloff, Bloomberg News reported. “Investors could become collateral damage from the actions of either side in the new cool war,” Smith, a former Deutsche Bank AG strategist and founder of research firm Ecstrat, said in a note published Friday. While he doesn’t rule out a short-term rebound in the ruble or the nation’s benchmark equity index after the market rout, the longer-term prognosis “remains grim.” Russia’s dollar-denominated RTS Index suffered its biggest weekly plunge in more than two years after the harshest U.S. sanctions to date blocked trading of a handful of companies, including billionaire Oleg Deripaska’s metals giant United Co. Rusal. While some traders see the panic selling around the move as a buying opportunity, others are questioning whether all Russian assets are now vulnerable to penalties. Read more.