Investors and Khodokovsky’s guilty verdict
27 Dec, 2010 14:03
With Russian stocks remaining undervalued and the government looking to promote investment, Business RT spoke with Ben Aris from Business New Europe magazine about the impact of the Khodorkovsky guilty verdict.
RT: How would you assess business activity in Russia this year?BA: “Well Russia, clearly, I mean everybody has been interested in emerging markets, however Russia has clearly trailed behind all the others. Its been out of favour, but towards the second half of the year, it has started to catch up.Like you said mainly because it has been so undervalued, and looking forward to the next year it is looking much more prospective.”RT: And was the decision expected of another guilty verdict for Mikhail Khodorkovsky, and what impact do you think guilty verdicts such as this will have on investor sentiment?BA: “Certainly the market, I think, was assuming that he was going to be convicted, it was a foregone conclusion, and you see the reaction on the stock market today – there was virtually none.They thought there was no other outcome.As for sentiment in general, Khodorkovsky remains a big issue, of course, and this is another black eye for Russia in terms of investor sentiment, its image.I mean the Kremlin has been pushing very hard to try and remake that image, and attract more investment, particularly foreign direct investment.But it has been going very slowly.Russia remains very under invested in terms of per capita – when you compare both the BRIC peers and the other central European peers.And so this is a setback, but, when all is said and done, strategic investors are still coming, I mean the appeal of the largest consumer market in Europe is undeniable for them.It is more the peripheral investors, the people who are looking at Russia – haven’t quite made up their mind – then they see things like the Khodorkovsky trial and it unsettles them, so it will slow the whole process down.”