Director of Equity Financing, FINAM Investment Company, Moscow
Moscow traffic at night
A few weeks ago I read a piece published in Money and Markets titled, "Steer Clear of the U.S.: Look to Asia!" which I found interesting. Although the author is extremely bearish about American markets, I think that his basic advice to investors to diversify their portfolios internationally and to have strong exposure to commodities and hard assets as a hedge against global inflation is sound. And I would add Russia to his list of good places to invest for rapid growth.
Click on the extended post to read more.
A government office building in Moscow
In mid-July, Russia's Federal Statistics Service released a report for the first half of 2007 that bolsters my previous argument ("Investing in Russia's Growth Sectors") that the best sectors to invest in Russia right now are construction, telecommunications, railways, and other distributive industries. Kommersant also published an article ("Industrial Brute Strength: Six Month Growth of Production in Russia Comparable to Asian Tiger Economies") that supports my view.
While some people may not like what I have to say, it seems every month analysts from leading multinational financial institutions such as Merrill Lynch, Morgan Stanley, and Goldman Sachs are confirming that Russia is one of the top emerging markets in the world. Perhaps my anonymous critics would prefer to argue with them, instead of hurling insults at the messenger?
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.
Comments
Interesting articles and links. If only I had the $$ to profit from making all the right investments myself.
I had recently been reading that the ruble is increasingly undervalued. A Bloomberg report today by Ye Xie and Bo Nielsen had an unnamed Merril Lynch source claiming the ruble was undervalued by perhaps as much as 40%. This was supported by statements by Kenneth Rogoff, economics professor at Harvard University.
"The ruble is undervalued. Attempts to keep the currency pegged are putting great upward pressure on inflation."
Inflation would seem to be the one fly in the ointment for near future economic prosperity in Russia. I'm curious what role increased foreign investment is having on inflation in Russia. Is there a point where it becomes too much of a good thing for the Russian economy and ruble?
Posted by: W. Shedd | August 6, 2007 1:05 PM
I am curious what you think of the Russian market now with the currency run. I work in Kazakhstan and our "agashka's" (young, yuppy types with mad money) have been making a serious run on the local banks getting rid of tenge and buying up all the dollar and euro they can find.
How will this affect investments in Russian and Kazakhstan?
Posted by: Michael Horner | August 23, 2007 7:01 PM