Time to Consider Investing in Russia: Jim Rogers

Author: us-russia
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Published 12-09-2012, 06:42
Russia's stock market is extremely cheap and could offer interesting opportunities for investors, renowned investor Jim Rogers told CNBC. 

Jim Rogers, chairman of Rogers Holdings, shares his view on investing in Russia, "Mr Putin seems to have realised he will go down in history as just another thug unless he takes some real actions, and he has started to do things that even surprise me."


The World Bank reported earlier this year that inflation in Russia had reached its lowest point for two decades and the country’s public debt is currently approximately around 10 percent of GDP (gross domestic product), compared to the U.S. where it has reached 100 percent.

Rogers, who visited the country recently, said President Vladimir Putin has taken measures to attract investment.

"He’s starting to do things which startle even me,” he told CNBC Monday.

"They’ve set up a huge fund of government money, billions of dollars which they will invest side by side with investors,” he said, adding that he wasn't sure of the exact way he would invest.


"The stock market is extremely cheap on a price earnings ratio but unfortunately the stock market is mainly oil and gas," he said.

Rogers believes the country has learnt its lessons from the past. In 1998, the country had to ask for a bailout from the International Monetary Fund after an economic crash in Asia led to poor demand for Russian oil exports. Rogers has yet to invest in the country but explained that he is seriously considering the idea after being skeptical about Russia for the last two decades.


"I want to find the opportunities which I haven’t thought of, which CNBC hasn’t reported yet,” Rogers said. 

"That’s where there would be opportunities if there are opportunities, and it may just be the ruble.”

Russia’s MICEX index has risen 5.42 percent since the start of the year and Russian stocks are seen as having better price to earnings ratios than other countries that form part of the BRICs (Brazil, Russia, India, China).

Todd Berman, Head of Investment Banking at Troika Dialog, one of the largest investment houses in the Russian Federation, told CNBC that Russia’s entry into the World Trade Organisation, back in August, was also a crucial step.

"They are entering into the WTO this year. This is a tremendously important step and I think that will continue to drive the structural reforms that the Russian government has committed itself to,” he told CNBC Tuesday.


He said that the euro crisis is barely being felt in Moscow but conceded that many people’s view of Russia is still deterring investors.

"You’ve got a very cheap market, robust macro story, earnings growth and yet I think investors are reticent to come into this market right now,” Berman said.

"I think in part that’s driven by the perception of political risk that is probably a little bit overblown.”

Looking forward, Berman believes that Russian stocks will show even more positive movements after stability in the euro zone has been achieved.


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