An economic crisis, a crash in oil prices and hefty sanctions for intervention in Ukraine – even with such a dire backdrop Russia's stock market has proven to be the world's best performer in early 2015.
The country's benchmark stock index has surged almost 27 percent in the year-to-date as investors dip their toes back into a market that suffered sharp losses at the end of last year.
The gains outpace a rise of about 2.8 percent in the S&P 500, the broadest measure of U.S. shares, and a 13 percent rally in the pan-European Euro Stoxx 600 Index.
"At some levels, Russia is extremely cheap so if you are ever going to invest in Russia, maybe now is the time," David Stubbs, a global market strategist at J.P. Morgan Asset Management, told CNBC Tuesday.
However, he warned that a "big risk" remained: the escalation of tensions between Russia and neighbouring Ukraine, which has strained the country's relations with the U.S. and Europe.
"When you talk about retaliation (from Moscow) – one possibility is preventing people from flying over Siberia and capital controls. So you could put your money into Russian assets and it might be very hard to take your money out," Stubbs added.
Russia, one of the world's biggest oil producers, has also been hard hit by the collapse in oil prices which have more than halved in value since last June. The impact has been exacerbated by a weak Russian ruble.
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Alexander Branis, director of Prosperity Capital Management, was bullish on the outlook for Russian equities, however.
"The oil price has stabilised, the ruble is very cheap, so the prospects are quite good (for stocks)," he told CNBC on Friday. "Russia is the best performing market this year in dollar terms in the world. So we are up too, in dollar terms."
All about sanctions
For other analysts, the lifting of sanctions against Russia would be a significant trigger for further stock market gains. But this could be some way off -- according to Reuters, the U.S. and Europe are considering harsher sanctions on the country for breaches of a February 12 ceasefire in Ukraine.
Russia's economy has been severely hurt by the impact of sanctions and the slide in oil prices. It is expected to enter recession in 2015, while last week sovereign ratings agency Moody's downgraded the country's debt rating.
"Russian stocks are very, very cheap right now," Mark Mobius, executive chairman of Templeton Emerging Markets Group, told CNBC Tuesday.
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"The problem is sanctions. Many of us are not able to go into the companies we would like to go into, simply because of the sanctions. Once they are lifted, then I think you will see a lot of money going in."
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