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Russia’s cooling market climate has spurred an exodus of international investors. And the forecast calls for the cold snap to linger.

A worsening outlook for the price of crude, the country’s biggest export, and international sanctions that are pushing Russia toward its first recession since 2009 have prompted money managers at Franklin Templeton Investments and BNP Paribas SA to retrench. With the world’s largest energy exporter so dependent on oil, which along with natural gas accounts for half its budget revenue, Morgan Stanley predicts “a long winter” absent any other growth drivers.

“For now there’s stability, but the price of oil seems to be settling in at a new normal,” Ruchir Sharma, the head of emerging markets at Morgan Stanley Investment Management, said in an interview at Bloomberg headquarters in New York. “It’s a stability, but stability with stagnation. I don’t know how long they can coexist, but this seems to be the prognosis for now.”

Investors, who had been returning to Russia after the world’s biggest stock slump in 2014, are backpedaling as Brent crude dropped 21 percent from this year’s high and the ruble went from the best-performing emerging-market currency to the worst. The extension of sanctions linked to the Ukraine conflict that curb investment and limit access to foreign markets have damped speculation that the recession will be milder than projected.

Capital Flight

French lender BNP Paribas SA exited its local fund-management venture six years after its acquisition. Franklin Templeton Investments is liquidating its 20-year-old regional fund amid a lack of investor interest and trading limitations imposed by the sanctions, Mark Mobius, chairman of the firm’s emerging markets group, said by phone last week.

Capital outflows from the country may reach $90 billion in 2015 after last year’s record of more than $150 billion, according to the Economy Ministry. The median estimate of 42 economists surveyed by Bloomberg is for a 3.5 percent contraction in gross domestic product this year. Russia’s economy expanded 8.5 percent in 2007 as oil prices averaged $73 per barrel.

Brent, the oil grade traders use to price Russia’s main export blend, has dropped 53 percent from last year’s high and sells for about three-fifths its five-year average price. Lower oil prices “are here to stay,” and Russia’s economy will have a hard time recovering, Yves Lemay, managing director in the sovereign risk group at Moody’s Investors Service, said last week.

“Russia’s economic prospects depend on whether policy makers find and utilize longer-term sources of growth,” Alina Slyusarchuk, an economist at Morgan Stanley, said in a June research note.

CO1 Comdty GP

Gross domestic product will resume expansion in late 2015 or early 2016, Prime Minister Dmitry Medvedev said last week. The International Monetary Fund this month lowered its forecast for 2015’s slump to 3.4 percent from 3.8 percent and said the economy will grow 0.2 percent next year.

“Not much was done to diversify Russia’s economy when oil was $115 a barrel,” Kirill Yankovskiy, director of equity sales at Otkritie Capital Ltd. in London, said by phone last week. “The fact that you can’t rely on commodity exports as much as before provides an understanding that the only way to proceed is to focus on technology, infrastructure, investments.”

Crude Plunge

The Bloomberg Russia-US Equity Index slumped 2.3 percent to a six-month low at 11:30 a.m. in New York. The dollar-denominated RTS Index extended its decline from this year’s high to 23 percent after entering a bear market last week. Crude fell for a fourth day and the ruble slid 1.5 percent to 59.323 against the dollar for the worst performance among major global currencies tracked by Bloomberg.

Lower oil prices are “bitter medicine,” Yacov Arnopolin, a portfolio manager who helps oversee about $38 billion in Emerging market debt at Goldman Sachs Asset Management in New York, said by phone. “It feels like they may now be away from the eye of the storm, but I don’t think the crisis is behind them.”

Trashline: (Updates ruble, Brent prices in penultimate paragraph.)