Page 56 - BNE_magazine_04_2019

56 Opinion bne April 2019
MOSCOW BLOG:
Businesses threaten to boycott the St Petersburg investment summit as Michael Calvey does his first month in jail
Ben Aris in Berlin
US citizen and arguably Russia’s most successful fund manager Michael Calvey was arrested on Valentine’s Day, and is still sitting in jail despite a public outcry by his colleagues in the finance industry and a raft of leading Russian liberal politicians.
His case is due to go to trial in April, when Calvey and his colleagues that were also arrested face up to 10 years in jail if convicted. The case has been another blow to Russia’s already battered investment image and now there are calls for international businessmen to boycott the St Petersburg International Economic Forum (SPIEF) in protest.
They are unlikely to stay away. And actually if they did it would probably make things worse.
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International portfolio investors yanked $130mn out of the Russian equity market in a week – the biggest outflow since 2010.
It's tempting to link the sell off to the Calvey affair, as
other emerging markets have seen big inflows since the start of this year, as it has become clear the US Federal Reserve bank is not going to tighten its monetary policy further, which always drives cash into the emerging markets stocks and bonds.
But while the Calvey affair has surely contributed to the “risk on” sentiment on Russia, the really big concern at the moment is the impending US sanctions, the Defending American Security Against Kremlin Aggression Act (DASKAA).
US fund manager Michael Calvey of Baring Vostok Capital partners.