While the stock market in Russia has had a poor summer, the country's bond market has picked up thanks to its risk-averse banks.

Earlier this year, Russian state Eurobonds due to mature in 2020 were issued at a price of 99.3 to par. They dropped as low as 92.5 in May as investors sold them due to a loss of confidence and the Greek financial crisis.

But over the summer, they rallied to 103, and yields have consequently fallen 150 basis points. Nikolay Podguzov, head of bond strategy at Renaissance Capital, a Moscow-based investment bank, said, “The market has been in a rally mode since June.”

International investors are increasingly enticed to Russia, drawn by its low sovereign debt levels making it the ideal destination for foreign currency bond market investment.

Russia’s ministry of finance is issuing ever more rouble-denominated debt, which it is finding easy to sell. Indeed, so keen are investors for the high-quality rouble debt that, despite the jump in issuance, yields have barely been affected.

Chris Weafer, head strategist at investment bank Uralsib, said, "Investors looking for emerging market exposure are increasingly choosing domestic bond markets as a place to invest because these markets are less correlated with international markets than equity markets are.

“Bond markets reflect the domestic story which across many emerging markets is good. That is opposed to equity markets which are vulnerable to what’s going on on Wall Street,” he said.