MOSCOW (Reuters) - Russia's huge resources and a consumer products boom promise robust growth for another decade, but recent events including war in Georgia underscore the political risks to its financial markets.
Top executives and policy makers will examine the country's future in a series of exclusive interviews at the second Reuters Russia Investment Summit on September 8-10.
Following is a series of quotes from fund managers and analysts about the investment climate in Russia:
ZINA PSIOLA, HEAD OF EMERGING MARKETS EQUITIES AND MANAGER OF RUSSIA FUND, CLARIDEN LEU ($750 million in Russian equities under management):
"You cannot fix the country from the top down. You have to promote entrepreneurship and the creation of small and medium companies, even if it's uncomfortable for incumbent companies."
"As an investor, if I managed pension money with a 15-year outlook, in the first one or two years it will be all about inflation and whether companies can become more efficient.
But for the 15-year view, Russia has to move one step further and promote internal competition because this is how you improve your business."
"I don't see Russia going down the route of Venezuela. That's the only risk: that Russia will choose to combat inflation not by promoting competition and breaking cartels, but by nationalizing things."
"They should start by promoting domestic competition. You have sectors where there are just two or three players. It's a very comfortable place to be -- fantastic for margins -- but it definitely adds to inflation."
JAMES BEADLE, CHIEF INVESTMENT STRATEGIST, PILGRIM ASSET MANAGEMENT (Pilgrim manages around $200 million in Russia):
"The best thing we can hope for is that the geopolitical problems will die down, and then the risk premium will stabilize and it will be possible to call the market cheap."
"After YUKOS, we had a long sideways market and a slow, steady recovery, which is my best-case outlook at the moment."
"There is an increased sense of economic risk in the short to medium term connected to overspending last year in a global inflationary environment."
"I don't think there's a serious problem for the economy but I think it will slow enough to create concern in the short to medium term, which will add to foreign investors' disinclination to bring money here."
"Under the circumstances, the government is doing a reasonable job of limiting the impact of high oil prices on the economy but I don't think they'll be able to manage any true diversification until oil prices become a less substantial inflow."
RON SMITH, HEAD OF RESEARCH, ALFA BANK: Continued...
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