Posts from the ‘Investment’ Category

Outcomes from SPIEF: continuing conversations and the wisdom of Jack Ma

In an earlier post I provided some background to this year’s St Petersburg Economic Forum (SPIEF) and focused on the event’s growing Asian connections. As expected, the 19^th Forum did indeed produce a number of new deals in Asia, as well as globally. In this post I will discuss a number of key developments and reflect on the overall sentiment of participants at SPIEF, including that of Alibaba Chairman Jack Ma who shared some valuable insights on the state of Russian investment. Continue reading

SPIEF: A window into Europe, Asia or both?

‘From here by Nature we’re destined
To cut a door to Europe wide,
To step with a strong foot by waters.
Here, by the new for them sea-paths,
Ships of all flags will come to us –
And on all seas our great feast opens’

 Pushkin – The Bronze Horseman

When people ask me to describe the difference between St. Petersburg and Leningrad in a few words, I always suggest that they look at the origins of the city’s two faces.

Leningrad was borne in the flames of the Bolshevik revolution and the name paid tribute to one of the most tragic and controversial people in the history of the country. However, St. Petersburg was envisaged as a merchant port and a centre of commerce for the Russian Empire back in 1703. Few but the experts recognise that the port of St. Petersburg was on par with other great merchant ports of Europe at the dawn of World War I. However even fewer realise that long before then, the moors and swamps on the banks of the river Neva formed the starting point of the trade route between the Vikings and the Byzantine Greeks, making it one of the most lucrative trading routes of medieval Europe. As such, I find it only natural that the country’s most significant international event, the St. Petersburg International Economic Forum (SPIEF), is hosted by my hometown (18-20 June) and is in its 19^th year.

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A Platform for Cooperation

It is refreshing to be reminded of the ongoing ties which demonstrate how much European countries – including Russia – have to offer one another. This is why I was particularly glad to read recent news of some very promising Russian-German cooperation in the tech sector.

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The Russian market: mixed views and performances

The Russian economy and market continue to be in a state of flux, and are likely to remain so for the foreseeable future. Falling oil prices and geopolitical events have led to analysts, investors, and ratings companies writing Russia off for 2015. However, there was considerable media coverage last week regarding the MICEX index, which is reportedly the best performing index so far this year (at 27%, compared to 14% for CAC40 and DAX in second place). This may be a temporary phenomenon, but it demonstrates that even a volatile market can generate considerable interest and investment opportunities. Continue reading

Hi-tech solutions

It is not widely known, but many mobile phones, cars and airplanes run software made by a Russian technology company, writes BNE. This company is Luxoft, valued at $684 million during its IPO in 2013, and a leader in an industry where Russia excels. Despite the momentary economic difficulties in Russia, Luxoft expects further growth in 2015, and its main markets remain in the US and Germany where it does around half of its business. This example highlights the potential of the tech sector in rejuvenating the Russian economy. Continue reading

A turbulent start to 2015

Russia was in the headlines last week, with economic figures breaking recent records, and the overall situation appearing quite dire. Brent crude has fallen to a five-year low, dipping temporarily below $50 a barrel, Russian foreign exchange reserves have fallen to the lowest levels in the last four years, the cost of insuring Russian bonds against default rose to the highest level in almost six years, and the Rouble fell again to around 63 per dollar.

Against such a backdrop, it is particularly interesting to note the conflicting reports on Russia’s sovereign debt that were issued by the world’s two leading rating agencies. Continue reading

The Elgin Marbles at St Peterburg’s State Hermitage

While political relations between Russia and the West have cooled in recent months, there has been on-going and growing collaboration in a number of significant fields. For instance, it has gone almost unreported that a new ISS mission commenced last month, and the crew of the mission includes a European, an American and a Russian.

Last week, the British Museum announced that it had lent a selection of the Elgin Marbles to the Hermitage to celebrate its 250^th anniversary. The celebrations kicked off with a high-definition 3D mapping projection called the “Dance of History”, featuring videos illustrating the most significant historic events of St. Petersburg and the Hermitage. The festivities continued with the opening of a number of exhibitions, including an exhibition dedicated to the iconic British painter Francis Bacon and the reclining marble sculpture of the river god Ilissos, part of the Elgin marbles collection, which twenty five centuries ago decorated the facade of Greece’s Parthenon temple. continue reading

Weathering the economic winter

“Выйди замуж за Морозка, станешь богатой”

Из русской сказки пересказанной В. Панюшкиним

 “Marry Father Frost, and you will become rich”

From a Russian fairy tale retold by Valery Panyushkin

In the longest of a recent spread of articles focused on Russia, the Economist begins its coverage in a restaurant, where items targeted by western sanctions have reportedly disappeared from the menu.  This is then linked to the imminent threat of an economic recession which Russia faces, following the introduction of sanctions against Russia.

The Economist is right that Russia does indeed find itself in a very precarious economic position.  However the idea that this has been predominantly brought about by sanctions is very misguided.  Russia’s biggest problems are entirely of its own doing.  And it is this very fact which should allow the ‘wounded bear’ to weather the storm.  Continue reading