Growth keeps investors on board
Foreign investors with their eyes fixed on Russia's continued powerful economic growth are shrugging off the recent arrest of Mikhail Khodorkovsky. The CEO of oil giant Yukos and Russia's richest man, he was pulled in on October 25 by Kalashnikov-toting officers of the FSB (federal securities services). This might have briefly unsettled the stock market, but foreign companies selling soap and coffee to increasingly affluent Russian consumers believe their businesses will be unaffected.
"It was a flash in the pan," says Peter Boone, the head of research at Brunswick UBS Warburg. "Even if they liquidate Yukos, which I am sure they won't, then it will be a bigger flash in the pan. But key is that the economy has passed critical mass. The disappearance of Yukos won't alter the structure of the economy, which currently creates a very profitable business environment."
Right on cue the economic development and trade ministry announced towards the end of last month that it was upgrading the full-year GDP forecast to 6.6%, the seventh revision this year.