Registrars were indeed involved in a number of investor scares: last year FFMS banned Pakva and Novy Registrator (the registrar for 7th Continent shares) from a mandatory buyout from minority shareholders — Pakva switched registrars to avoid the ban. However, registrars are licensed in the first place, and secondly, all ownership protection risks have been completely eliminated by the Central Depositary, counter FFMS and CD representatives. The latter bears all responsibility, provides final proof of title, insists Head of CD Eddie Astanin. FFMS were unavailable for comment.

“Russia is extremely hard to get news from on a regular basis — it works much better with any other country”, says Senior Analyst at Vanguard Group Jonathan Lemko. State authorities’ response is slow, and data is not always transparent, he complains: “This is one of the reasons Vanguard invests a lot less in Russia than in other countries”.

Information exchange is actually a major problem that affects the investment climate, admits Deputy Minister for Economic Development Sergey Belyakov. A more proactive strategy is in order, says Belyakov: “We make regular trips abroad to meet major funds, we invite them here – our situation and our achievements should be reported more effectively”.

There is a much deeper problem, admits Lemko “You are one of many – investors know hundreds of other, more attractive and transparent emerging markets”. The fund could possibly revise its attitude towards Russia, he adds on a positive note. The fund simply used outdated info, risk data copied from previous reports, nevertheless, there is a multitude of other reasons for not investing in Russia, says portfolio manager at Swedbank Robur Rysslandsfond (a key Russian fund, according to Bloomberg) Elena Loven: “The recent TNK-BP story — with Rosneft taking away all the cash and leaving nothing for dividends — is yet another caveat for investors”. Many of them will raise the Russian share risk premium, complains Loven.

Margarita Papchenkova

Trading infrastructure, Project Group №1