R is For Russia - and Returns
Director of Equity Financing, FINAM Investment Company, Moscow
A view of the Kremlin with cathedrals in the foreground
Want to invest in Russia? Here is what The Street.com offers in terms of advice:
Brazil, Russia, India and China are the four countries expected to outpace their emerging market peers over the next several decades…of the BRIC countries, Russia is probably the most volatile market and the one that has been off the radar of mainstream American investors the longest.
I think this is one of the most reasonable overviews of exchange traded funds that I have read in the last few months
The Hermitage State Museum at night. Russia's northern capital will host a commodities exchange starting in August 2007
St. Petersburg Energy Commodity Exchange Opens Next Month
Last week a meeting at Russia's Ministry of Economic Development and Trade discussed issues related to the international commodity exchange that is scheduled to open in St. Petersburg next month. The idea is to start trading Russian oil domestically. Russia currently trades its “UralsBlend” crude on the energy exchanges in New York and London. Russia is not the first oil-rich country to create its own domestic energy exchange – the United Arab Emirates has already done this – but this is another step towards making this country a hub of global finance.
According to Russian Economic Development and Trade Minister German Gref, the new St. Petersburg exchange will begin selling all energy products in 2009-2010. Trading in petrochemicals is set to begin this autumn. Oil trading may begin by the end of 2008.
The meeting with Mr. Gref resolved that by the end of this month the list of potential participants in the exchange will be closed. Officially the establishment of the commodity exchange was approved and all parties agreed to start listing on the new index . Besides the New York Mercantile Exchange (NYSE:NMX) and its oil advisor Expertica Limited (Gibraltar), the participants will include: the Government of St.Petersburg, Gazprom, Rosneft, Tatneft, TNK-BP, Lukoil and Transneft.
German Gref (right) meeting European Union Commissioner Peter Mandelson on April 22, 2005
Russian Vodka From an American-Owned Company?
The Russian alcohol industry is proving to be attractive to investors. However, last week we saw the first example of a foreign company that is coming to Russian with the intention of producing vodka here. America's Central European Distribution Corporation (NASDAQ: CEDC) announced last week that it has signed a binding Letter of Intent (LOI) to acquire a significant majority interest in the Parliament Group, a holding company for various alcoholic beverage production and distribution assets. The Parliament Group produces the number one selling premium brand of vodka in Russia, Parliament Vodka.
Politicians & Investors: Going Their Separate Ways?
In spite of the political tensions between Moscow and London over the Litvinenko case, British companies are continuing to expand their major investments in Russia.
London & Regional Properties, a British real estate developer, plans to spend at least $1 billion on projects in Russia in the next 12 months. The investments will include a chain of hotels that the company is building for the Hilton, Geovanis said Tuesday. London & Regional is also finishing a hotel in St. Petersburg that is due to open in September. Hilton Hotels Corporation has signed up three developers to open hotels in Russia, the UK, the Caribbean and Central America over the next five years. Hilton Hotels Corporation (NYSE:HLT) has teamed up in Russia with London & Regional Properties to open 25 hotels in Moscow, St Petersburg and key regional cities. The first hotel is expected to be in the centre of Novosibirsk and in Moscow we will see the grand opening of the Hilton Moscow Leningradskaya Hotel very soon.
The Leningradskaya Hotel in Moscow - one of Stalin's "Seven Sisters", now being renovated and reopened by the Hilton Hotel chain - an American capitalist icon
American Private Equity Firm Buys Stake in Russian Logistics Company
Great Circle Capital, an emerging markets private equity fund based in Stamford, Connecticut, is investing $21.1 million in Moscow-based STS Logistics, a leading Russian freight forwarding, warehousing, and customs services provider. Last week AIG Interros Russia Century Fund, a private equity fund established by the international financial corporation AIG and Interros, signed a joint venture to buy a 10% stake in the Russian auto parts dealer Incom-Auto. According to Russian financial experts, this will help the company be better prepared for its upcoming IPO.
And finally, Electronic Arts (NASDAQ:ERTS), the world's largest producer of computer games, announced this week that it is opening a branch in Russia. The company hopes to increase Electronic Arts' share of the Russian market to 20% in the next four years.
You can read the original post at Vladimir Kuznetsov's blog, Equity Financing in Russia. The views expressed in this post and on his blog are the personal opinions of Vladimir Kuznetsov, and are reproduced here solely for educational purposes. To read more Russia Blog posts about Russian capital markets, click on the finance section or type www.russiablog.org/finance in your web browser.
