Will there be a relief rally in 2021? There should be. In the year after Russia’s previous crashes there has been a big bounce-back as investors got back into a market that was “too cheap to ignore.” Russia’s equity market remains extremely volatile but all said and done, it has some very large and very valuable companies.

In August 1998 the market crashed, the ruble lost three quarters of its value, the state defaulted on $40bn worth of treasury and Eurobonds and the entire top tier of the banking sector collapsed. The RTS fell from a high of almost 400 to a low of just 38 in the middle of 1999. But the market bounced back, returning investors 197% that year.

In September 2008 the market crashed again as a result of the sub prime global financial crisis. Again the RTS fell from an all-time high set on May 19, 2008 of 2,487.92 to fall to a low of 1,058 that September. In 2009 the market enjoyed a relief rally that took the index back to 1,445, earning investors a return of 129%.

The next crisis came in 2014 when the oil price collapsed, sending the ruble from around RUB35 to the dollar to a low of RUB80. The RTS lost 45% of its value that year, but it took a lot longer for the economy to recover from a deep recession and the relief rally didn't come until 2016, when stock prices soared by 52% in that year.

This time may be a little different. The market gained 45% in 2019, but that was not a post-crash relief rally per se, but a reaction to Russia’s spending on the 12 national projects and its gradual emergence from the stagnation of the last decade.

This year stocks had lost 40%-45% in the worst of the crisis in March but already bounced back as the pandemic restrictions were lifted over the summer. However, at the time of writing the market remains under water to the tune of 25% since January. If the equity market stays true to form, there should be a strong relief rally in 2021 – albeit less spectacular than following previous crises. Analysts at BCS Global Markets are predicting that the market will rally by at least 30% in 2021.