Three years ago, when privatization began in Russia, the entire range of government enterprises offered at auction was valued at less than Microsoft.
In the last two years, the capitalization of enterprises traded on the Russian Stock market has more than tripled --- to about $100 billion. (During the past six months alone, capital flowing into Russian securities has caused the Russian stock market to grow by 250%.) Market analysts calculate it will increase another five or six times by the end of the decade. If their expectations materialize, the capitalization of the Russian stock market will exceed that of France's market and approximate Germany's Such a valuation would put the real size of the Russian economy closer to one trillion dollars, rather than today's official $470 billion.
In 1990 I founded a company that became the pre-eminent provider of telecom services to Western corporations operating in the former Soviet Union. Since 1985, I've traveled between the States and Russia/fSU 65 times. Last year, when I sold my firm to a NYSE company, I thought I'd "retired" from the mad Russia business. In August, I returned to Russia --- my first trip in nearly two years --- and witnessed what I consider a critical mass of signs that Russia has turned a corner on "the changes."
This thread is meant to consolidate observations about Russian and other former Soviet Union stocks and fundamentals, and the Western Funds based on them. Because it's impossible to understand or measure Russia logically (you can only do so with your soul, to paraphrase Pushkin) I anticipate that the thread will provide some of the context --- and the beautiful, tragic humor --- that is Russia.
Russia's economy --- long the source of endless jokes, ridicule and honest pain --- is may now be primed to become an extraordinary source of large profits.
bye,
/k1b0
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