Post A Reply
my profile
login
|
register
|
search
|
faq
|
forum home
»
Allstocks.com's Bulletin Board
»
Hot Stocks Free for All !
»
NDOL : 300% revenue increase, calling *0.47
» Post A Reply
Post A Reply
Login Name:
Password:
Message Icon:
Message:
HTML is not enabled.
UBB Code™ is enabled.
[QUOTE]Originally posted by DIGDOUGH: [QB] This is interesting. This is from somebody that knows Russia and has invested there. No picture. Who cares. From today's Chicago Tribune: Foreign investors spooked but not scared off by Russia By Alex Rodriguez Tribune foreign correspondent Published June 18, 2006 MOSCOW -- For foreign investors thinking of putting their money in Russia, the story of William Browder should have been seen as a shot across the bow. Browder's $4 billion Hermitage Fund is dedicated to investing in Russia. Seven months ago, Russian authorities banned Browder from returning to Russia from London without saying why, though colleagues suspect the move amounted to payback for questions he raised about corporate governance abuses at state connected or controlled Russian energy enterprises. And yet, Browder's plight has failed to discourage foreign investors from looking to Russia, starting with Browder himself. "With oil prices at $70 a barrel, it's a very attractive place to invest," Browder said in a phone interview from his London office. "Judging from the flow of money from funds like mine and others into the Russian market, it's clear that people are becoming more accepting of the risks, largely because high oil prices have made investing here so appealing." In many ways, Russia remains an unpredictable place where rules change as the game goes along, but that is not stopping investors from scrambling for a share of one of the world's most lucrative emerging markets. Russia's boom in initial public offerings is ample proof. Last year, foreign and domestic investors poured $4.8 billion into Russian IPOs. Over the next 12 to 18 months, Russian IPOs are expected to raise an additional $20 billion. Leading the charge is this summer's IPO of Rosneft, the state-owned oil giant that was instrumental in the dismembering of Mikhail Khodorkovsky's Yukos oil firm. The flurry of IPO activity illustrates how much distance Russia has put between itself and the ashes of the 1998 financial crisis, when investors fled and legions of working-class Russians lost their life savings. Since then, Russia's GDP has been galloping at a healthy clip, growing 7.2 percent in 2004 and 6.4 percent last year. A 6 percent jump in GDP is projected this year. Last year, the country's stock market soared 80 percent. So far this year it's up an additional 30 percent. This year the market has been more volatile, plunging 9.4 percent last week, its biggest drop in 18 months. Still, analysts say that in the long term, oil prices will buoy investor interest. "Right now, few investors can afford to ignore Russia," said Andrei Gromadin, an analyst with Moscow's MDM Bank. "There is still some risk, but oil prices make the situation so attractive here that the importance of these risks get diminished." No exact date for the Rosneft offering has been announced, but most analysts believe it will precede the July 15-17 summit of G8 leaders in St. Petersburg. Russia, which holds the G8 chairmanship this year, has put energy security at the top of the summit agenda, and a successful Rosneft IPO would serve as an endorsement of the Kremlin strategy to regain control over the country's energy wealth. The offering was initially structured to raise as much as $20 billion, which would have made it the largest IPO ever. However, it is now expected to be $10 billion to $13 billion and is to take place at exchanges in Moscow and London. Some Western observers question whether the offering should take place at all. Once a middle-tier state enterprise struggling in the shadows of oil giants like Yukos and Lukoil, Rosneft instantly became a dominant force in Russia's energy sector with the controversial 2004 acquisition of Yukos' core production asset, Yuganskneftegaz. The Kremlin drew harsh criticism internationally for skirting the rule of law in its quest to renationalize lucrative oil assets, but when the dust settled, Rosneft had become Russia's third-largest oil producer. In an opinion piece this spring in The Moscow Times, billionaire financier George Soros said the lack of transparency surrounding Rosneft's acquisition of Yuganskneftegaz clouds Rosneft's IPO: "To argue that it will improve transparency ignores the fact that Rosneft is an instrument of the state that will always serve the political objectives of Russia in preference to the interests of the shareholders. Is Rosneft willing to put this into the prospectus?" F&C Asset Management, a London-based investment fund, is just as wary. "Investors should tread carefully when considering investing in Rosneft," F&C said in a statement this spring. "The Russian legal regime is opaque and difficult to navigate. We don't pretend to understand it, and if we cannot understand something, we won't invest in it." Browder's case is another example of the risks associated with investing in Russia. The U.S.-born British citizen had lived in Russia since 1996 and had a valid visa. In addition to heading the fund, he has been one of President Vladimir Putin's staunchest supporters. When he arrived at a Moscow airport Nov. 13, authorities said his visa was no longer valid and, 15 hours later, put him on a flight back to London. Two weeks later, the government explained it had the right to bar anyone deemed a threat to "national security, order or public health." "It's perplexing," said Browder. "I brought in $4 billion in capital and have been one of their biggest supporters in the West, and this is what happens to me." Moscow analysts say Browder's case may be related to his campaigns to root out abuses at Gazprom, Russia's state-controlled natural gas monopoly, and Surgutneftegaz, an oil firm with Kremlin ties. Whatever the reason, banning Browder has cast doubtsabout the wisdom of investing in Russia. In a letter addressed to Putin, London Stock Exchange chief Clara Furse warned that banning Browder "could have a negative impact on Russia's image as a country that welcomes foreign investment, and on the ability of Russian companies to raise capital outside Russia." Other Western business people don't share Furse's pessimism. Browder is one of them. "My opinion has always been that Russia is an imperfect country, and valuations there are deeply discounted because of those imperfections," Browder said. "You're buying assets at a 75 to 90 percent discount compared to prices in the West. Factored into that discount are all of the bad things we've been talking about--including my visa." ---------- ajrodriguez*tribune.com [/QB][/QUOTE]
Instant Graemlins
Instant UBB Code™
What is UBB Code™?
Options
Disable Graemlins in this post.
*** Click here to review this topic. ***
Contact Us
|
Allstocks.com Message Board Home
© 1997 - 2021 Allstocks.com. All rights reserved.
Powered by
Infopop Corporation
UBB.classic™ 6.7.2