Russian stocks to see more upside in 2011

Russia's stock market has grown around 20 percent this year and still has a room to grow in 2011. Elena Titova, President of Morgan Stanley Russia spoke with Business RT.

RT :Russian stocks have had a reasonably successful year but analysts say Russia could be doing more to attract them. What does it need to do?

ET:“I would say there isn’t something really driving investors away, it was the competition of the other BRIC countries that made the difference.And Russia has been hit hardest during the last crisis obviously, and the other BRIC countries have been growing faster since – almost twice as fast as Russia – and therefore Russia has just become less sexy for the international investors, and therefore that has affected Russian stocks and bonds.It has improved quite a bit by the end of this year, and we are looking quite optimistically into the next year.”

RT:So Russia will be staying quite competitive to other BRIC countries?

ET:“It will become more competitive I think, and we see more investors coming back to the Russian market, with the recent IPO’s and secondary offerings of Russian companies, in the last quarter – interest of strategic investors – interest is coming back.

RT:What will privatization bring to the Russian economy and what are the risks here?

ET:“Well privatization is one of the things which is bringing back the interest of investors for sure, and it will have a lot of plusses if it is done successfully and is done right.And it will increase the liquidity of the market.Most definitely it will increase the capitalization of the stocks in the market overall.And it will reduce the involvement of the government in the economy.It is definitely a plus and investors are looking forward to it.As I said it has to be done right and government is really trying to do it right, and it will organize and be well timed in terms of the markets.