American investors showing increasing confidence in Russian market

On 18 November 2013, The NYSE Russia Day took place in New York City. The conference, held for the third time, consisted of three sessions: ‘The Next Stage in Russia’s Economic Development: Capitalizing on Opportunities’, ‘Beyond Oil and Gas – Investing in Key Growth Sectors in Russia’, and ‘Building the Next Generation of Russian Global Champions’.

Around 200 people attended the event, including government representatives, representatives of business groups from the US and Russia, and leading specialists from US banks and investment funds. Sergey Belyakov, Deputy Minister of Economic Development, headed the Russian delegation. Among the panellists were Anton Karamzin, Senior Vice President, Sberbank of Russia; Bob Foresman, Country Manager, Barclays Russia; and Albert Ganyushin, Head of International Listings, NYSE Euronext.

“For Russia, this meeting provided participants with the opportunity to share experience and assess whether we are working from the same page. We need to understand how sensitive the investment community is to what we do. The upshot is that our policies are largely in tune with investors’ expectations,” announced Sergey Belyakov. “Flotation on the New York Stock Exchange is a mark of distinction, and I very much hope that one day the Russian investment market will achieve a similar level of prestige... Currently, the amount of capital New York is able to offer is much bigger, and the NYSE’s requirements are, accordingly, stricter. Companies need to be able to meet these requirements.”

Ryan Chilcote, Bloomberg TV presenter and moderator of the panel discussion, also spoke highly of the event: “I believe this was an extremely open conversation with a lot of discussion on the effects politics can have on investors’ lives. It is simply not the case that the government has somehow tried to avoid these issues.”

Today, Russian companies are increasingly opening up to investors as they expand their stock, participate in joint projects with foreign partners, and invest abroad.

The ‘Building the Next Generation of Russian Global Champions’ session, held in association with the St. Petersburg Economic Forum, helped better familiarize the American investment community with the Russian market, its investment potential, and outlook, thereby marking an important step in the development of Russia–US economic relations.

“Russian IT, healthcare, and media companies will display market potential over the next five years,” said Drew J. Guff, Managing Director and Founding Partner of Siguler Guff & Company.

In addition, Albert Ganyushin, Head of International Listings at NYSE Euronext, remarked that, “For the most part, Russian companies are engaged in technology, and we will soon see that the best of these are small businesses, which will come here to try to win the attention of investors”. According to Mr. Ganyushin, there is another type of company that is more traditional for Russia; they have been in existence for a long time and, once they go global, they realize they need access to global capital outside Russia’s domestic market. The NYSE representative added that he expected more Russian flotations on the exchange as early as 2014.

The forum’s participants agreed that the Russian market was among the most attractive for American investors. The country’s investment climate is generally favourable, and its political risks are exaggerated, they concluded. The Russian economy attracted around USD 11.5 billion in American investment in the first half of 2013.