Moscow's dividend yield is highest among markets but investors are not biting

Moscow

THE world's most generous dividends are going a-begging as the strongest quarterly rally since 2012 in emerging markets leaves Russian stocks behind.

Investors are ignoring an estimated payout of 5.3 per cent in the next 12 months as they dump Moscow-listed shares on concern the US won't ease sanctions on Russia as quickly as previously expected.

The dividend yield is the highest among markets with at least US$100 billion in capitalisation and is even higher than sovereign-bond yields. But Russia still can't attract inflows.

As the performance gap widens between Russia and the rest of emerging markets, the case for buying Moscow shares is getting stronger.

Some investors are turning cautious on the rally from India to South Africa and Mexico, as valuations become expensive and volatility tightens to levels that preceded market declines in the past. If those markets stall, a portfolio with higher dividend yields -…