Page 25 - IFR Opportunities in Russian capital markets

CHAPTER 01
ifrintelligence reports/Opportunities in: Russian Capital Markets
Table 1.5: Russian external trade, 2004–06 (US$bn)
Dec 05 Oct 06 Nov 06 Dec 06 2004 2005 2006
Note: The CBR makes its own estimates, making more use of the flows of money than the goods flow recorded by Federal Customs. Both these sets of numbers can be different from Rosstat’s, which uses a third methodology. On the whole, the Federal Customs numbers are the most widely used, but in areas such as measuring foreign direct investment the differences can be up to 20%.
Source: CBR
US$bn
Exports Imports
Trade balance YoY, 3-mma, % Export
Import
24.5 24.9 13.9 15.7 10.6 9.2
28.3 20.6 31.7 35.2
25.6 30.0 183.2 16.2 19.4 97.4 9.5 10.6 85.8
15.2 16.8 34.8 33.7 35.7 28.0
243.6 125.3 118.3
32.9 28.7
304.5 163.9 140.7
25.0 30.8
Figure 1.12: Russian exports, by sector, 2006 (%)
Note: Data for Jan–Oct 2006
Source: RosStat, Russian Customs
23%
3%
6%
35% Oil Gas
5%
14%
Metals Equipment Chemicals Forestry Other
14%
Political events
A crucial year for politics, 2007 will see elections for the lower house of parliament, the Duma, in December 2007 and Presidential elections three months later, in March 2008. The Kremlin is expected to tighten its stranglehold over the Duma and Putin has repeatedly said he will stand down; he is constitutionally barred from running for a third term.
While fighting ahead of the Duma and presidential elections represent a real political risk, all of Russia's investment banks expect the transition of power to be smooth and believe Putin's promises that his successor will continue the same policies as his administration.
Despite being demonised by the Western press, Putin remains enormously popular with an approval rating that topped 80% in January 2007. Looking at his record over the last six years since he took office, it is not hard to understand why. Life under Putin has got noticeably better for nearly everyone in Russia, as shown in Table 1.6.
Table 1.6: Russian economic performance under President Putin, 2000–06
President Putin’s record
GDP per capita (US$) Government debt (%GDP) Stabilisation Fund (US$bn) FX reserves (US$bn)
New external debt (%GDP) RTS equity index Sovereign rating (FCIDR)
Source: Fitch
End 2000
1,784 63 0 28 50 143 ‘B’
End 2006
6,750 10 90 304 -4 1,911 ‘BBB+’
18