Emerging markets are in vogue right now as investors look for riskier plays to generate more bang for their buck as more traditional US and western European markets continue to stall on eurozone fears.

And one such area, the ‘Wild East’ of Europe, has seen a rush from traders to gain access to their financial markets with the main hub of the region, Russia, attracting the most interest. However, investor perceptions of a hard-to-access market persist.

“Russia is still very much perceived as a ‘difficult’, specialist market,” Philippe Carré, global head of client connectivity of trading and technology firm SunGard’s capital markets business in London, told Markets Media.

“There is a strong perception among our clients that if you want to trade Russian stocks, the way to go is to trade them on the London Stock Exchange International Order Book.”

But one emerging markets investment bank, Russian-based Renaissance Capital, which provides brokerage services for the Russian markets to SunGard’s international trading network, is a local player with many years experience of the Russian capital markets.

“Firms like Renaissance Capital help people understand the Russian market beyond the proxy traded on the LSE’s IOB,” said Carré.

“What we have seen over the last few years is an increasing demand from asset managers for emerging markets and, especially, for trading Russian products that are becoming increasingly popular.

“A number of firms are changing their trading policy. We have always had clients trading emerging markets over the years but, recently, more clients have expanded their horizon and what they’re allowed to do by their own compliance and their fund status.

“In the past, they would mostly have traded stocks in vanilla markets, like pan-European and US markets, but now they are looking for growth and improving alpha so they need to look beyond Europe and the US. Emerging markets give them the possibility to look at growth and buy into a growth story—some emerging markets have grown by 30% in a year.”

Russia, which now has just one main exchange, the Micex-RTS, is not a member of the European Union and, as such, has not seen an influx of competition from alternative trading venues that MiFID regulations have encouraged in the rest of the EU.

“Essentially the Russian market is no different from trading on Nasdaq or Amsterdam and I think that is something that we are trying to get across,” Sam Atkins, head of Electronic Trading Group product development and exchange connectivity at Renaissance Capital, told Markets Media.

“Russia is an emerging economy but the market structure is well developed. In a number of cases, Russia is even better, as there is no fragmentation or MTFs [multilateral trading facilities]—if you want to execute you do it in one place.

“The [Micex-RTS] exchange itself is very well developed, it’s got its own electronic central limit order book, based on price time priority, FIX order routing and market data—they even have a Fast Fix compacted data feed, native API, proximity hosting and co-location. It’s very similar to the vast majority of developed western exchanges.”

However, few global economies have managed to avoid the troubles of the ailing eurozone, which has dragged the Micex-RTS down by 7.4% since the turn of the year. But Russia’s domestic economy has grown at 4.9% year-on-year in the first quarter of this year, beating estimates of a 4.1% gain, according to the Moscow-based Federal State Statistics Service, known as Rosstat.

Meanwhile, Micex-RTS is to rebrand itself as the Moscow Exchange in a bid to open itself up to more foreign investors. Micex and RTS, the two Moscow exchanges, completed their $4.5 billion state-backed merger in December last year to form a single Moscow exchange. Operating profit at the combined group for the year ended December 31 totaled 9.3 billion rubles ($299 million), up from 6.2 billion rubles a year ago.