JP Morgan Chase & Co has advised its clients to reduce its shareholdings in Russian stocks as OAO Gazprom has proposed a dividend cut. Aside from this, the current falling oil prices and the policy stasis in the Russian government has resulted in low valuations for the Russian market.

Last April 20, Russia was deemed to be underweight according to JP Morgan's Asia and emerging market chief strategist Adrian Mowat as it is vulnerable to foreign outflows.

Gazprom is Russia's largest company in terms of market valuation and is the largest weight factor in the MSCI Russia Index. It has announed an annual dividend of just 33%. Russia has been unable to curb its budget deficit as there have been low revenues from its primary sources of oil and gas. 

According to Mowat, "Investors point to low valuations on Russian stocks as a bull case, but they cannot really answer our questions about what improvements they have seen recently in the policy environment or the expectations of future improvements."