Firm Praises Commodity Economies

LONDON -- Mongolian commodities and Ukrainian banks may be the key to weathering the global investment storm, says Eurasia Capital Management, but steer clear of Russian property shares.

The fledgling firm, set up to focus on Central Asia, Russia and Ukraine, said commodity-producing states like Russia, Ukraine and Mongolia would be more resilient to a U.S. slowdown than their manufacturing-reliant emerging-markets counterparts in Asia.

"Countries benefiting from rising commodity prices are better placed to withstand external shocks compared with emerging markets such as Turkey, which is dependent on foreign flows," said Alisher Djumanov, Eurasia Capital's managing partner.

Mineral wealth was a key factor behind his firm's move to launch what Uzbekistan-born Djumanov says is the first investment fund based in the Mongolian capital of Ulan Bator.

Djumanov was upbeat on Ukrainian banks, which are takeover targets as the country strives for closer ties with the European Union.

Djumanov also said he would step up investment in Russian property, though he would avoid metropolises such as Moscow, as real estate values there were high.

"Moscow is overcrowded. The best growth opportunities are in Russian regions where they have yet to see significant investment. So much infrastructure needs to be rebuilt and modernized," he said.

Though upbeat on the country's real estate, Djumanov said he would avoid Russian property stocks, including London-listed ones such as AFI Development, because they were overpriced.