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Why Russia is the “cheapest” major stock market in the world

Talking Numbers

Will Putin’s foreign policy swagger translate into a positive year for Russia’s markets?

A year ago, he was putting feminist punk rockers in prison. Now he’s trying to avert a US air strike on one of his allies.

Russian President Vladimir Putin is flexing his diplomatic muscles as the US threatens to punish Syria after chemical weapons were used on Syrian rebels. Penning an op-ed piece in today’s New York Times, the leader of the largest country on earth sternly warns that a US strike will escalate “far beyond Syria’s borders.”

(Read more: More ‘innocent victims’ if US strikes Syria: Putin)

Putin is trying broker a deal whereby Syria’s government, led by Bashar al-Assad, hands over its chemical weapons to international control as a way to avoid a US stroke. The rebels in Syria have so far rejected the proposal.

But as Putin – always one to show off his machismo (see clips in the video above) – makes a big splash on the world stage, the Russian stock market is crowing like a rooster alongside him. Since the start of the month, the RTS Index – the Russian equivalent of the S&P 500 – is up 8.2%.

But that’s in the short term. Russia is a volatile place, especially when it comes to its stock market. The RTS is still down 8.6% for 2013. The index is down 6% over the last three years but up 4% over the last five.

(Read: How wealthy is Russian President Vladimir Putin?)

So, will Putin’s swagger translate into a positive year for Russia’s markets?

To answer that question, Talking Numbers talks numbers with two market strongmen – Zachary Karabell, founder and president of River Twice Research, discusses the fundamentals while Todd Gordon, founder of TradingAnalysis.com, looks at the RTS Index’s chart.

Karabell says what’s driving the Russian markets is bigger than its leader’s posturing. Gordon says investors should keep an eye on one major commodity to see where Russia goes next.

What could be next for the Russian markets? Watch Karabell and Gordon give their analysis in the video above.

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