Global Counsel: major investors are pessimistic about the prospects in Russia


MOSCOW, October 19. Large foreign investors are pessimistic about the prospects for the Russian market, but their actions differently, according to the study of the consulting company Global Counsel, which is appreciated, as large foreign investors see Russia’s economic prospects.

The research conducted by the company, analyses the position of international companies in Russia after a year and a half, when the country was under international sanctions, global oil prices fell and Russia’s economic policy was highly volatile.

“At the time, as some of them pull back and reduce their activity in the Russian Federation, consider all other possible options, and some are trying to turn the crisis to your advantage and to expand our presence”, – stated in the report, the bill specifies that “if the conditions for business in the near future will not improve, this balance will likely change, and more and more companies will consider reducing its activity in the Russian market”.

The report analyzed the company’s statements about Russia 46 major foreign companies made in their quarterly and annual reports in 2014 and the first half of 2015. Based on this the following conclusions. “The vast majority of companies feel that Russia is rather pessimistic, both because of structural and cyclical factors. It’s six times more companies are looking to the Russian market negatively than positively,” the report said, but “committed to working on the Russian market and expansion on it twice more companies than those who seek to reduce it. A fairly large group of companies, however, either remained at the same position, or does not reflect their intentions in reporting”.

In addition, the findings of the company, there is a significant difference in the estimates and the behavior of companies in all sectors of the economy. “Pharmaceutical companies are more optimistic and the most pessimistic are the financial and energy sectors” – confirmed in the report.

At the time, as most companies don’t comment on public and economic policy of the Russian Federation, those who do speak negatively about any action such as food counter-sanctions and measures affecting the financial sector. “Some companies “raise the stakes” and increase their presence, despite the pessimistic assessments of the market, but we don’t know if this situation continue, because much will depend on external factors and internal policy,” the study said.

“Following a year and a half, it seems, will be critical for foreign investors, who will decide whether they remain on the Russian market or to leave it”, – commented the results of research chief economist, Global Counsel Gregor Irwin

Today, October 19, will be held the 29th session of the Consultative Council on foreign investments (FIAC). According to the press service of the Russian government, at the meeting it is planned to discuss questions of import substitution, regulatory, investment cooperation and development in the pharmaceutical, construction, agro-industrial and food sectors, the retail and subsoil use, energy markets and energy efficient technologies.

As previously reported with reference to the draft communiqué of the meeting of the FIAC, it is expected that the Council will discuss opportunities to increase the share of local production in the products of global corporations, which are sold on the Russian market.

Managing partner at the consulting firm EY in Russia Alexander Ivlev has informed that a meeting of the Council will be attended by the heads 33 of the world’s largest companies. In particular, the mission of the American Pepsico, Swiss Nestle, Singapore’s Olam, French Danone, the Dutch Unilever confirmed the participation of their leaders in the meeting.

The Council was established in 1994 and is a statutory body responsible for considering and preparing proposals on issues related to investment attractiveness of the Russian economy and problems of foreign companies in the implementation of investment projects on the territory of Russia.