Russia?

hedger

Whats your thoughts on investing in russian markets? Is it too late or is it the perfect emerging economy? Any good funds that you could recommend?

purch

it the perfect emerging economy?

No Significant Debt (well.........other than the stuff they didn't pay back in the 90's)

Stable Government

Resource Rich

3 reasons why it is almost 'perfect'

The Neptune Russia & Greater Russia Fund is a popular vehicle to invest into this market, although there are other Funds and Investment Trusts that focus on the area

Technically the RTS might be a little over-extended currently on back of the sharp rally over the last month which could mean there could be a slight pull back, but for a longer term investment view it should in my opinion be consider a prime investment area.

hedger

purch wrote: »

No Significant Debt (well.........other than the stuff they didn't pay back in the 90's)

Stable Government

Resource Rich

3 reasons why it is almost 'perfect'

The Neptune Russia & Greater Russia Fund is a popular vehicle to invest into this market, although there are other Funds and Investment Trusts that focus on the area

Technically the RTS might be a little over-extended currently on back of the sharp rally over the last month which could mean there could be a slight pull back, but for a longer term investment view it should in my opinion be consider a prime investment area.

Thanks purch. Ive been reading a bit about it and it seems a prime area. Moneyweek had recommended it based on its huge growth potential, resources and lack of exposure to the credit crunch but pointed out a few possible issues.
The question I have is how big do I go in? "All in" or more a "test the water" investment?

1echidna

When one looks at the problems BP is now having in Russia (accused of environmental misdemeanours, difficulties in getting visas and now being sued by a small shareholder for paying its staff too much) one wonders whether the Russians will ever allow foreigners to walk away with much when in investing in Russia.

hedger

1echidna wrote: »

When one looks at the problems BP is now having in Russia (accused of environmental misdemeanours, difficulties in getting visas and now being sued by a small shareholder for paying its staff too much) one wonders whether the Russians will ever allow foreigners to walk away with much when in investing in Russia.

This is one of the problems that moneyweek highlighted
"Governance risk: The biggest risk in Russia – as Yukos, BP and Shell have found out to their cost – is that the Kremlin will simply snatch assets from companies if it sees fit. Foreign investors lost $6bn when Putin attacked Yukos. In Medvedev’s own words: “Russia is a country of legal nihilism.” It’s promising that the country’s leader recognises this, but that doesn’t mean the situation is going to change. The key thing is to select domestic companies over foreign investors, and keep an eye on the political mood music – as long as a company is in favour with the Kremlin it should be reasonably safe"

1echidna

That is interesting 'hedger'. I guess everyone has also noticed that there are a number of very rich Russians living in London and elsewhere who have managed to transfer billions from Russia in profits made from the chaotic transformation to a market economy (of sorts). Perhaps though the Russians will not be so eager to allow capital outflows in the future whether it be from investments in foreign or domestic companies. I don't know how this would work but the Russians seem to be remarkably ingenious and unscrupulous in pursuing what they perceive as their interests.

hedger

I think there is certain risks but the general consensus is that Russia is far too good an opportunity to pass up (especially compared to our own economic outlook)

1echidna

I probably have a jaundiced view. Good luck 'hedger'.

purch

Until the 'style' of Governance changes (which probably will be never) then it will always have to be considered high risk and will continue to be an 'emerging' economy

Choosing the right vehicle to invest through, should be high on the list, as is choosing a manager who understands the 'market' in Russia

As part of a sensibly balanced spread of investments it ought to be an area that you keep a close eye on

hedger

purch wrote: »

Until the 'style' of Governance changes (which probably will be never) then it will always have to be considered high risk and will continue to be an 'emerging' economy

Choosing the right vehicle to invest through, should be high on the list, as is choosing a manager who understands the 'market' in Russia

As part of a sensibly balanced spread of investments it ought to be an area that you keep a close eye on

Neptune Russia and greater russia seems to be the recommended fund

1echidna

Interesting how what seems a good bet can turn distinctly sour as developments unfold.