Russian invasion spooks investors

#1
Interesting and predictable side-effect, but not at these high numbers (30%!). I always thought that one of Putin's strengths was his attitude towards foreign investors (and promoting investment in Russia for Russians who had previously invested overseas).

Oil profits can cover these loses, for now and if Moscow talks peacefully then things will most likely return to normal. It reminds me a bit of Thomas Friedman's analogy of investors as a 'herd'; when one gets spooked, then several do, then the whole herd tends to react and run to another food/water source.

Russian invasion spooks investors

After further falls on Friday, the Russian stock market has plunged more than 30% since the country's invasion of Georgia last month.

Investor confidence has been hit hard by the conflict.

Some international banks estimating that between up to $20bn (£11bn)in foreign capital has been pulled out of Russia in the last month alone.

Since the invasion the value of the rouble has slumped, reportedly leading to the central bank stepping in.

So whereas Russia may have got away with a slap on the wrist from Europe for its invasion, Moscow is being punished much more directly by international investors.

Analysts in Moscow say Russia is now seen as a risky place to invest and it will be a long time before confidence returns.

But Russia is not in any danger of imminent economic crisis.

More than $1bn a day flows in from oil and gas exports and Russia is sitting on foreign exchange reserves of more than half a trillion dollars, the third largest in the world.

But the financial fall out from Russia's Georgian adventure may now be giving the Kremlin reason to pause for thought.
 
#2
That's why I love BBC: it can take any subject, give it a makeover and with a straight face serve it to the public.

BBC: "After further falls on Friday, the Russian stock market has plunged more than 30% since the country's invasion of Georgia last month."

Not BBC: " The volume of direct investment in the Russian economy in the first half of 2008 decreased by 30%..."

Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars. По сравнению с аналогичным периодом прошлого года этот показатель увеличился на 35,6 процента. Compared with the same period last year, this figure rose by 35.6 percent."
http://translate.google.co.uk/trans...A0%D0%BE%D1%81%D1%81%D0%B8%D0%B8&hl=en&pwst=1

Sorry, Virgil, it's not yet time for you to uncork that champaign. :p
 
#3
Domovoy said:
Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars.
I hate to point out the obvious, but the 'first half' of 2008 means through June only. The Georgia incident did not occur until August. Your data is pre-Georgia. :wink:

Russians and economics, go together like the English and fine cooking. :twisted:

EDITED
 
#4
I'm not 'popping the cork' at all. I actually think it's a good thing. Moscow will pull back a bit, speak softly and be more friendly because of it. We are all intertwined nowadays, and we all should watch the results of our actions.

For better or for worse the US, Japan and EU are more immune to this effect because of the size of their economies.

If the BBC ain't your cup of tea there's always;

Market Watch -- Russian assets tumble amid worries about ruble

Int'l Herald Tribune -- Russian markets slide as ruble, oil weaken

Bloomberg.com -- Russian Stocks, Bonds Tumble as Central Bank Props Up Ruble
 
#6
Virgil said:
Domovoy said:
Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars.
I hate to point out the obvious, but the 'first half' of 2008 means through June only. The Georgia incident did not occur until August. Your data is pre-Georgia. :wink:


EDITED
:roll: I KNEW!!!!! I can't trust you!

The 'first half' means from January to the end of June. http://translate.google.co.uk/trans...B3%D0%BE%D0%B4%D0%B8%D1%8F%D0%BC&hl=en&pwst=1
 
#7
Domovoy said:
Virgil said:
Domovoy said:
Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars.
I hate to point out the obvious, but the 'first half' of 2008 means through June only. The Georgia incident did not occur until August. Your data is pre-Georgia. :wink:


EDITED
:roll: I KNEW!!!!! I can't trust you!

The 'first half' means from January to the end of June. http://translate.google.co.uk/trans...B3%D0%BE%D0%B4%D0%B8%D1%8F%D0%BC&hl=en&pwst=1

Domovoy, Aren't you glossing over the fact that both you and Virgil agree that there was a 30% dip in invetment in Russia over a 6 month period.

Am I alone in thinking that this is a significant number regardless if it's pre or post Georgia?

It clearly shows that international investors are nervous about putting their money in Russia. I think the whole BP thing most likely has more to do with that then the news from Georgia.

Which I believe, is the spirit of Virgil's post.
 
#8
Domovoy said:
Virgil said:
Domovoy said:
Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars.
I hate to point out the obvious, but the 'first half' of 2008 means through June only. The Georgia incident did not occur until August. Your data is pre-Georgia. :wink:


EDITED
:roll: I KNEW!!!!! I can't trust you!

The 'first half' means from January to the end of June.
Um, that's pretty much what I said--through June (I assumed you understood January was the first month of the 'first half of 2008'). I'll be sure to point it out next time.
 
#10
Boney2728 said:
Virgil said:
Domovoy said:
Russians and economics, go together like the English and fine cooking. :twisted:

EDITED
And what is wrong with fine English cooking ?
I believe it's considered along the lines of "Fine American Beer" or "The Fighting French Spirit" to international circles.
 
#11
There must be some dopey investers out there, who are only now leaving Russia!

Dopey politicians agreed - both partys, but normally 'money men' are more switched on.
 
#12
Boney2728 said:
Virgil said:
Domovoy said:
Russians and economics, go together like the English and fine cooking. :twisted:

EDITED
...fine English cooking ?
Now wait, I thought it was only a rumor, like Bigfoot or the Loch Ness Monster.
 

RP578

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Book Reviewer
#14
ghost_us said:
I think the whole BP thing most likely has more to do with that then the news from Georgia.
Yeah I agree with view. I don't think that the Georgian conflict would impact on investors, who if we're being honest are utter whores, as much as the experience of BP. Who wants to invest in a country to be treated with such contempt?

And what is wrong with fine English cooking ?
You tell them Boney! The Philistine's obviously never had a slap up plate of bangers and mash like what I just 'ad!
 
#15
parapauk, Virgil, from ROSSTAT: " The volume of direct investment in the Russian economy in the first half of 2008 decreased by 30%..."

Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars. Compared with the same period last year, this figure rose by 35.6 percent." etc., etc., etc...

You have a long wait... http://www.youtube.com/watch?v=MGTWmrnPdgk&feature=related
 
#16
Domovoy said:
parapauk, Virgil, from ROSSTAT: " The volume of direct investment in the Russian economy in the first half of 2008 decreased by 30%..."

Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars. Compared with the same period last year, this figure rose by 35.6 percent." etc., etc., etc...

You have a long wait... http://www.youtube.com/watch?v=MGTWmrnPdgk&feature=related
I think you've missed the point. Oh well. =|
 
#17
Domovoy said:
parapauk, Virgil, from ROSSTAT: " The volume of direct investment in the Russian economy in the first half of 2008 decreased by 30%..."

Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars. Compared with the same period last year, this figure rose by 35.6 percent." etc., etc., etc...

You have a long wait... http://www.youtube.com/watch?v=MGTWmrnPdgk&feature=related
We can wait. We did last time.

http://www.youtube.com/watch?v=fXW02XmBGQw&feature=related
 
#18
ghost_us said:
Domovoy, Aren't you glossing over the fact that both you and Virgil agree that there was a 30% dip in invetment in Russia over a 6 month period.

Am I alone in thinking that this is a significant number regardless if it's pre or post Georgia?

It clearly shows that international investors are nervous about putting their money in Russia. I think the whole BP thing most likely has more to do with that then the news from Georgia.

Which I believe, is the spirit of Virgil's post.
I think there is a bit of difference between BBC's "since the country's invasion of Georgia" and "6 months"...

You are right, Russian economy is experiencing a glitch, but overall it is stable, partly because it is not as dependent on the US economy as the economies of Western Europe.

And that glitch definitely doesn't amount to BBC's "slap on the wrist from Europe; Moscow is being punished; blah, blah, blah..."
 
#19
Virgil said:
Domovoy said:
parapauk, Virgil, from ROSSTAT: " The volume of direct investment in the Russian economy in the first half of 2008 decreased by 30%..."

Also, "The volume of portfolio investment rose by 4.4%... The accumulated amount of foreign investment in Russian economy by the end of the first half of 2008 amounted to 242.1 billion dollars. Compared with the same period last year, this figure rose by 35.6 percent." etc., etc., etc...

You have a long wait... http://www.youtube.com/watch?v=MGTWmrnPdgk&feature=related
I think you've missed the point. Oh well. =|
Probably, since I'm not an economist... :oops:

But you are WRONG about English cooking!
 
#20
I doubt Putin will lose a minute's sleep.

BBC economic reporting... Not exactly the world's leading commentators. Wonder if the Beeb would have tied the shift in Russian deposits to events in Georgia, if the value of deposits had gone up during this period?
 

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