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	Create New Topic   My Posts   My forum buddies   Invite friends   Private messages Russian brides > Main Forum > Russian boom Author Post wtrav02 Member send PM   block PM add to buddies Send: 9/8/2003 9:11:39 AM   Check this out about prospects of Russian economy, cheers! Russian Boom Lures Merrill, Goldman After '98 Default (Update1) Sept. 8 (Bloomberg) -- Russia's longest economic boom since the breakup of the Soviet Union is proving irresistible to Merrill Lynch & Co., Goldman Sachs Group Inc. and Citigroup Inc. five years after the world's largest securities firms lost billions of dollars in the country's worst default. AO Yukos Oil Co.'s $11 billion purchase of billionaire Roman Abramovich's oil company, OAO Sibneft, has helped boost Russian acquisitions to a record $19.2 billion this year, almost twice the total of the two previous years combined. That's without counting BP Plc's $7.7 billion joint venture with OAO Tyumen Oil Co., the biggest foreign investment in Russian history. Bond sales this year reached an all-time high of $4.7 billion, following February's $1.75 billion sale of 10-year debt by OAO Gazprom, the world's biggest gas producer. ``A lot of banks that left Russia'' when the nation defaulted on a record $40 billion on Aug. 17, 1998 ``are now coming back,'' Bruce Misamore, chief financial officer of Yukos, Russia's biggest oil producer, said in a telephone interview from his Moscow office. All the major ``banks and investment banks are constantly knocking on our door,'' Misamore said, declining to be more specific. Brent crude has risen to $27 a barrel from $12 the day of Russia's default, boosting profits for the world's No. 2 oil producer after Saudi Arabia. Russia has 17 billionaires, the world's fourth-largest group, up from eight in 2001, according to Forbes magazine. The economy is growing for a fifth straight year, helped by 45 consecutive monthly increases in consumer spending on products ranging from mobile phones to appliances. Stocks Rally Russia's RTS Index of stocks has soared to 541.19 Friday from a record low of 38.53 on Oct. 5, 1998. Russia's benchmark is the world's seventh-best performing major index this year, up 51 percent, trailing indexes in Brazil, Pakistan, Thailand, Argentina and Venezuela. That's been a boon for airlines amid the worst ever slump in air travel: passenger traffic between Russia and Germany, Europe's biggest economy, rose 43 percent in 2002 from 1999, according to Lufthansa AG. ``Boarding a plane on the way to Russia is like arriving at a school reunion where you recognize many of the faces, mainly bankers and lawyers,'' said Dmitri Rozanov, 37, a London-based banker at J.P. Morgan Chase & Co. who works with Russian companies. Flights ``are full and at times it is even difficult to book a hotel unless you do it weeks in advance.'' In 1999 and 2000, the flights were half empty, he said. Russian companies have raised $5.6 billion in the capital markets so far this year, with almost all the money -- $5.3 billion -- coming from bonds and loans, Bloomberg data show. Companies sold $5.7 billion of bonds and stocks in all of 2002, more than double the $2.3 billion raised in 2001. Banks Collapse Russia's default sent the ruble tumbling, causing the stock market to plunge and leading to the collapse of domestic banks such as Inkombank and SBS Agro. UBS AG, Europe's biggest bank by assets, lost about 630 million Swiss francs ($446 million) in the 1998 bond default, while New York-based Citigroup, the world's largest bank, had about $400 million of losses. The two banks are now the top advisers on Russian acquisitions after advising on the Yukos purchase of Sibneft. New York-based Goldman Sachs, the world's third-largest securities firm by capital, is advising Tyumen on its venture with BP, Europe's second-biggest oil company. London-based BP was advised by Merrill Lynch and Morgan Stanley, the No. 1 and No. 2 securities firms, both from New York. Morgan Stanley has worked for BP since managing its 1977 initial public offering. $20,000 Membership Russian President Vladimir Putin, 50, has helped spur economic growth by cutting income tax to a flat 13 percent from as high as 30 percent, and allowing the private purchase of real estate, according to Mikhail Fridman, chairman of Alfa Group, Russia's largest privately held bank. Putin's predecessor, Boris Yeltsin, appointed five prime ministers in his last two years in office; Putin, elected in 2000, has had just one. Growth in Russia, Europe's seventh-biggest economy, is forecast to reach 6 percent this year, compared with 0.75 percent for the European Union, creating wealth not seen since the 1917 Russian revolution. At the Moscow Country Club, executives and bankers are bidding $20,000 for memberships, double the price in 1998, said Peter Kizenko, a trader at Brunswick UBS, the Moscow investment- banking joint venture of Zurich-based UBS. Three new golf courses are being built in the Moscow region. Russia's 17 billionaires puts the country behind the U.S., Germany and Japan. Russia's richest businessmen -- known as the oligarchs -- made fortunes buying state-owned assets cheaply after the fall of the Soviet Union in 1991. wtrav02 Member send PM   block PM add to buddies Send: 9/8/2003 9:11:56 AM   ussia's Billionaires Investors such as Mikhail Khodorkovsky, 40, Russia's richest man with a fortune estimated at $8 billion by Forbes magazine, are being wooed by international investment bankers. Khodorkovsky, the biggest shareholder in Menatep Group, controls Yukos. In 1999, he was accused by some shareholders, including U.S. investor Kenneth Dart, of attempting to dilute their stakes in Yukos's subsidiaries. Yukos denied the allegations. Khodorkovsky and other Russian tycoons are working on their public images; Khodorkovsky is advised by British financier Lord Jacob Rothschild on charitable ventures. ``Our relationship with Yukos is not just with the company, but with the shareholders -- with Khodorkovsky and Menatep,'' said Ed Kaufman, 38, head of investment banking at Brunswick UBS. Brunswick UBS and Russia's Investment Bank Trust advised Yukos on the Sibneft acquisition; Citigroup advised Sibneft. Abramovich, 36, controls Sibneft. Russia's second-richest man, worth about $5.7 billion, hired Citigroup to advise him on his personal business. Four months after Citigroup helped Sibneft negotiate its sale to Yukos, the bank helped Abramovich buy London-based soccer team Chelsea for $233 million in cash. Increased Competition ``The competition is increasing,'' Irackly Mtibelishvily, Citigroup's 32-year-old head of investment banking in Russia, said in an interview from his Moscow office. ``We are going to see a lot more M&A deals in Russia -- foreigners investing in Russia, Russians investing outside of Russia, and Russia-to- Russia deals.'' ``I see a lot of international strategic investor interest in Russia, encouraged very much by the BP-Tyumen deal,'' said Elena Titova, 36, who runs Goldman Sachs's business in Russia. ``Russians have realized that they do need to be good to their international partners.'' Titova has been running Goldman's Russia investment banking since 1997. Titova and her family have moved back to Russia from London in the past year, and the firm's senior executives, such as European Chief Executive Officer Peter Weinberg, have been flying to Moscow more frequently, she said. Return to Moscow Her move reflects a trend at many Moscow-based banks of hiring so-called ``repats,'' Russians who were living abroad and are now returning, and ``White Russians,'' those who were born to Russian families who fled after the 1917 Bolshevik Revolution, said Yury Rubinovich, managing partner of New York-based Inter- Capital Inc., an executive search firm. Merrill, with Russia's Alfa Bank, is advising RAO Unified Energy System, the world's largest electricity company by capacity, on a plan to spin off some units and merge others. J.P. Morgan, the second-biggest U.S. bank by assets after Citigroup, is advising the Russian government on the sale of OAO Svyazinvest, the national phone company. Unified Energy System will need as much as $100 billion of investment in the next 10 years to modernize the infrastructure of the old Soviet monopoly, said David Geovanis, a UES board member and managing director of Basic Element, owner of half of Rusal, the world's second-largest aluminum producer. $5 Billion a Year ``The reform of the electricity sector in Russia will create a massive market for investment,'' UES Chief Executive Officer Anatoly Chubais said in an interview from his Moscow office. Chubais, a former finance minister who now is running for the Russian parliament, said the plan may bring the industry ``as much as $5 billion of investment a year for the renewal and building of a new generation of network capacity.'' Gazprom has hired Frankfurt-based Deutsche Bank AG, Europe's second-biggest bank by assets, and UBS to underwrite more bonds after Morgan Stanley and Dresdner Kleinwort Wasserstein helped sell $1.75 billion of 10-year bonds in February. Yukos has hired banks to underwrite bonds as well, though it recently delayed the sale and took out a loan. Gazprom paid $20 million in fees to Morgan Stanley and Dresdner Kleinwort Benson for its February sale, or 1.125 percent of the value. Most bond-sale fees average 0.75 percent to 1 percent of the value of the bonds. In another boon for investment banks, the government may sell about $2.5 billion of Eurobonds by the end of next year, its first sale of foreign currency- denominated debt since 1998, Russian Finance Minister Alexei Kudrin said last week. Roadblocks Securities firms also have been advising Russian companies on acquisitions outside the country. Russia invested $4 billion internationally last year, including OAO GMK Norilsk Nickel's purchase of Stillwater Mining Co. in Columbus, Montana, making it the leader in Eastern Europe in the amount it invests abroad. Foreign companies such as BP that invest in Russia have run into roadblocks, and risks remain for bankers seeking business there. BP bought 10 percent of oil producer OAO Sidanco in 1998. It agreed to pay $375 million for another 15 percent last April, three years after threatening to ditch its Russian holdings because it lost Sidanco's main oil unit in a bankruptcy sale that it called ``invalid.'' Lebedev's Arrest Last month, Russian Economy Minister German Gref said money started to exit the country in June and July, amid government investigations into alleged tax evasion at Yukos and the arrest of Platon Lebedev, chairman of the Menatep Group, Yukos's biggest shareholder. Yukos said Lebedev's arrest on charges of tax evasion and theft was ``politically motivated.'' He's awaiting trial in a Moscow jail. ``There's no escaping the key question everyone looking at acquisitions in Russia is asking: How long before Putin resolves the Yukos-Lebedev affair?'' said Bruce Bean, counsel in Moscow at Clifford Chanc wtrav02 Member send PM   block PM add to buddies Send: 9/8/2003 9:13:29 AM   the world's biggest law firm. The Russian revival can ``be killed by the profound uncertainty that has arisen since the arrest of Lebedev at the beginning of July.'' Brunswick UBS, which reduced its staff by more than 50 percent in 1998, has the largest presence among international banks in Russia with about 125 employees. The firm is hiring ``at all levels,'' UBS's Kaufman said. Credit Suisse First Boston, with about 90 staff in Russia, said it may ``moderately'' expand its equity team two years after reducing trading in Moscow. CSFB, the investment-banking unit of Zurich-based Credit Suisse Group, had among the biggest losses in Russia following the 1998 default, amounting to about $1.3 billion, prompting the firm to fire a third of its staff. `Russian Mentality' Citigroup has seven investment bankers in Moscow. Morgan Stanley and Goldman have Moscow offices and declined to say how many people are based there. Merrill may reopen in Moscow. Goldman is building a capital markets and corporate acquisitions team, Titova said. ``What you don't have yet is a lot of full-service operations inside Russia,'' said Misamore of Yukos. ``Many of the banks fly senior managers in from London to supplement their very small, or even non-existent teams inside Russia.'' Russia's Investment Bank Trust is the 15th-largest global adviser on mergers and acquisitions this year, according to Bloomberg data, the highest ever ranking for a Russian investment bank, after it helped advise Yukos on its takeover of Sibneft. Yukos and Menatep are shareholders in Trust. ``Relationships are key: we understand the Russian market, the Russian mentality, the Russian reality,'' said Ilia Yurov, the 32-year old chairman of Trust, sitting around an antique wooden table in his Moscow office. ``You can't underestimate that when you deal with Russian companies.'' Last Updated: September 7, 2003 22:12 EDT Thunderdome Member send PM   block PM add to buddies Send: 9/8/2003 3:27:23 PM   Makes me wonder as to your work Wtrav - or do you play stockmarkets as a hobby? Really big players may roam the field there now, but only they can afford to do their homework which is a rather costly excersise. Investment there for you and me remains Russian Roulette however. Heineken had breweries built near completion. They flogged the lot at a substantial loss to get out. Yeah, they're there now but they buy the beer (i.e. have it brewed by someone). Cheaper and less risk, manage a brandname only. Makes one wonder. wtrav02 Member send PM   block PM add to buddies Send: 9/8/2003 11:46:06 PM   Eastern Europe is full of opportunity. Russia is not for retail investors to get in right now I agree with you. I would give it another 3-5 years to begin becoming attractive for small investments with private funds unless it's real estate in big cities. Laws don't protect foreign investment and you have to know the right people to get the right "protection" doing business. But, keep an eye on Russia, it has vast potential. What this article is saying is the gap between Russia and the West is rapidly closing. What is now an economic boom will spark social transformation and higher standards of living. Maybe ten years from now Russia and Ukraine will be EU memebers and Russian gals looking for the American dream will be a thing from the past. Thunderdome Member send PM   block PM add to buddies Send: 9/9/2003 5:31:02 AM   We appear to agree on a couple of things however disagree on the time frame connected to this. In the USSR the government (whoever they were) were the people to do business with. Not easy then but it worked. Nowadays one does not know who is in charge, and in a sharktank it makes bad fishing. Also the various fish swim in different as well as overlapping tanks, and the predators roam with not only mutual consent but are also organised in groups. Not the funny taxlaws (pay upfront) but THIS aspect will remain a stumbling block, and only a full restructuring could solve this deeply embedded 'russian way'. You'll notice I say it this way because it is intermixed with cultural aspects, exactly the same as drinking & smoking habits (which you must have seen, astonishing really), and such things tend to change only slowly. I foresee a rather longer period for reform (or adaptation, pick your term), but will agree with you that probably (hopefully) a general consent will develop that things MUST change, and that ‘free enterprise’ does not work quite like this. Economic measures will not be imposed but will simply develop, and progress in the world market will depend mainly from the bottom up, i.e. small-scale business up to the multinationals. Your excerpt above describes only the latter, for reasons that organising on a larger scale is possible now, however difficult still. Once the structural principles change more lower-profile business will siphon over to, or even develop in, this physically huge country with vast potential. Of course zillions invested now will affect their ranking in the various classifications, but the grunt eventually will be the man in the street owning some shares for his retirement plans. And do not forget that China has opened already, limited yes, but the numbers concerned are mindboggling. If Russia resents they have to look on to this development only they will be forced to take appropriate steps regarding their (NOT ours!) reform or restructuring. But Wtrav, that’s the problem really – who’s Russia these days? It spans from East to East, enclosed by the West, and trying to adapt. I think they’ll have to eventually, but how long it will take is a good guess. If you volunteer to mention some years only I’d say you’re a bit of an optimist – but I can’t blame you running an energetic brand new household! Adapt yourself Pal, those are self-inflicted injuries :) wtrav02 Member send PM   block PM add to buddies Send: 9/9/2003 11:55:26 AM   Asia is a different story. Not only there is abundant human capital at very low cost but also raw materials and components for production. Asian work ethic cannot be matched either (especially by Russians). So, Russia is not going to want to compete head to head with Asia. Where I see Russia growing as an export market is commodities, oil, natural gas, metals, specialized manufacturing such as high-tech defense equipment, and software (especially software that uses algorithms - they still have some of the best scientists). In the domestic markets, there are countless opportunities for a huge country that lacks pretty much everything and will have the income to invest in re-building its cities, creating new businesses and increasing standards of living. I am positive about the future of the Russian economy in 3-5 years time frame. I think ten years from now will be up there with China just different competencies. You're right on all the right flags that you raised. deanis Member send PM   block PM add to buddies Send: 9/10/2003 12:54:00 AM   Russia and the Ukraine both are exploding economically. Since my first trip there in 2000 I can't believe the changes! This is why I would agree with wtrav02 with the 3-5 years time frame. Do the math!The equation is simple. About 200 million Russians and Ukrainians all wanting the products and services we in the west have enjoyed for decades. When the US rebuilt Germany and Japan on our tab as well as provide military protection (Therefore no defense spending for both countries) they both have become economic super powers. Now that the cold war is over Russia will save billions and eventually will invest in its own economic structure. To me the most interesting point this thread has brought to our attention is this party is almost over. As wtrav02 stated when the standard of living improves in this country these ladies will no longer be interested in men from abroud. Lets face it. That is one of the main reasons we have any chance in hell with model quality highly educated women of Russia and Ukraine. Right now we offer them and their future family a better quality of life. I say this FSU fantasy we are living will last for another 5-7 years tops. Think about it. In five years the young 20 year old ladies we will be courting will never have known communism. CodeRed Member send PM   block PM add to buddies Send: 9/11/2003 12:40:26 PM   FOREIGNERS ALLOWED TO START BUSINESSES IN RUSSIA BEGINNING JANUARY 1, 2004 MOSCOW, September 11 (RIA Novosti) - Beginning January 1, 2004, foreigners and teenagers aged 14 and older are allowed to start businesses on the territory of the Russian Federation, Sergei Dukanov, who heads the Department of Registration and Record-keeping of Legal Entities and Natural Persons at the Russian Ministry of Taxes and Duties, told a press conference on Thursday. He explained that a corresponding supplement to the Law of State Registration of Legal Entities and Individual Entrepreneurs would enter into force in the beginning of the next year. Dukanov said minors could get registered as businessmen without being given the status of legal entities only with consent from their parents or guardians. Foreigners, he went on, would be able to start a business if they have a residence permit or a document permitting them to stay on Russian territory. wtrav02 Member send PM   block PM add to buddies Send: 9/13/2003 8:00:54 AM   Russia is progressing because of its large size and because it has Putin. Ukraine is not progressing because of its smaller size and because it has Kuchma (a known mafia king). These two countries are going different ways. Foreign investment in Russia is in the tens of billions annually. Foreign investment in Ukraine is a mere $5 billion since independence (compare this to Poland' $40 billion since independence, a country of similar population size to Ukraine)! The largest deterrent to fereign investment is the lack of laws that protect private property (especially intellectual property). For example, try to buy the newest, richest version Microsoft Office program for computers in the U.S., you'll pay a hefty sum because of licensing. Try to buy the same program in Ukraine, you'll pay a lot less because of piracy. thisyearsmodel Member send PM   block PM add to buddies Send: 2/2/2004 11:17:55 PM   Anybody: Does the former USSR's econmic growth spell a downturn (or eventual elimination) of the market for "foreign husbands" sought by Eastern women, such as this site represents? jetmba. Member send PM   block PM add to buddies Send: 2/3/2004 12:42:22 AM   I guess you would have to ask the Russian women (which would be a different forum) about that. Each of them has their particular reasons for looking for a foreign husband - just as each of us has our own reasons. If the former Soviet countries do catch up in terms of economic progress - it will do us the service of quieting our critics who think that we (American men) only take advantage of the economic differences. Perhaps more will take seriously the fact that each group (American men and Russian women) looks for personaility factors that are more prevalent in the other population. Olga Moderator send PM   block PM add to buddies Send: 2/3/2004 8:10:27 AM   I've seen hundreds of ladies looking for husband abroad. beleive me, bad economy is not what make them do it. Its more because of a certain difference in a mentality of russian and foreign men. Thats what ladies say a lot. Especially those who already have friends married to foreign men. Many ladies who join marriage agencies have good job and education, good life conditions-but they are still lonely. jetmba. Member send PM   block PM add to buddies Send: 2/3/2004 9:42:00 AM   Thanks Olga. Even better to hear that coming from a Russian woman. crashnsplash Member send PM   block PM add to buddies Send: 2/3/2004 3:57:40 PM   Thanks for your insight Olga, thats what I hear alot from Russian girls, but it helps hearing it from you also. BlueBird Member send PM   block PM add to buddies Send: 2/3/2004 11:20:33 PM   wtrav02, at first you say "fifty years from now Russia will be the poorest nation" (see Yalta advice) and then you claim that "Russia has vast potential". Don't you think it is a controdiction to yourself? thisyearsmodel Member send PM   block PM add to buddies Send: 2/4/2004 12:20:39 AM   Mr. jetmba and Olga- I appreciate your insights -- thank you for the feedback. Your Reply: Your name:   New Registration Password:   Forgot password?   refresh Code:   Russian brides > Main Forum > Russian boom
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