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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (1931)	2/5/1998 1:04:00 PM
From: Real Man	Respond to of 9980

I would go with funds as I think ADRs are overpriced compared to what you can get inside Russia. Besides, you get diversification and avoid more risks. There is enough political risk over there. There is poverty and discontent caused by the reforms, which could easily lead to a communist president in the next election. The market is up 3x compared to 1995 (was up 5x as of October 1997), and I guess people have hard time to understand there is much more upside potential; the state property was sold for a song during privatization - and is still being sold for a song. However, now there is concern about the ruble - GKO (government short-term bonds) hiked %% twice - from 14% to 24% and from 24% to 40% quite recently. Still the foreign investors are fleeing the market. Note that the stock market is not that large - less than 40 bln $. In other words, I see absence of political stability as a very significant long-term risk. But when the risk is gone, so will these prices. -Vi