Brazil's President Luiz Inacio Lula da Silva, the thumbs up sign during a meeting with members of the Federation of the Agricultural Movement, at the Presidential Palace, in Brasilia, Tuesday, May 22, 2007.
Photo: AP
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Foreign Investors Leave Shaky Russia for Stable Brazil
The decline in stock indexes of Russia could be attributed to general fatigue of foreign investors from the country’s stock market and to political component of Russia’s economy. Nowadays, foreign money is leaving Russia for more stable Brazil.
The choice of Brazil made by investors funneling money to BRIC states is understandable. The market of China is generally viewed overheated and the adjustment is strongly expected there. India also faces the overheating hazard, which makes politically stable Brazil the best choice of the quartet.
Russia is not the only party affected –investors tend to pull out of India and China as well, transferring the money to Brazil, where the companies’ assets are yet underestimated.
The analysts say foreign investors are withdrawing from Russia’s stock market in an effort to fix profits. The exit is fueled by rather tense relations of Russia and the West and by forthcoming elections here. The media coverage of Russia’s events couldn’t be called positive, which makes foreigners even more nervous.
Another negative factor is poor results reported by oil companies. For foreign investors, Russia is first of all an oil state and poor performance of oils prompt them to sell Russia’s stocks at large, RBC Daily reported.
www.kommersant.com
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