Top share Russia: Abroad invests 50 percent more in the Russian economy

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Investors from abroad invested 50 percent more in Russian stocks last year than in 2018. The media report this, citing the management consultancy KPMG. 2019 was the strongest year for foreign investments in Russia since the sanctions were imposed.

Foreign investors invested $ 20.9 billion in Russian assets in 2019. That is 49.5 percent more than in the previous year ($ 14 billion in 2018), writes the Russian business newspaper RBK with reference to a market analysis by KPMG. The accounting and consulting firm has the Russian Mergers & Acquisitions (M&A) Market evaluated. Accordingly, the total volume of all deals on the M&A market in Russia increased by 21.5 percent to $ 63 billion.

Get out of deep sleep

Russia’s economy has adapted to the sanctions and overcome the dependence on high oil prices – this is how KPMG explains the development. According to the newspaper, analyst Lydia Petraschowa, head of investment and capital markets at KPMG, provides more security for investments in Russia through surpluses in the Russian sovereign wealth fund. The size of the National Wealth Fund this year amounts to seven percent of GDP.

Other reasons for the investment boom: Russia’s national debt is low, the national projects are being implemented and several Russian companies have been exempted from sanctions in early 2019, the expert said.

The majority of foreign investments were again in 2019 in the oil and gas sector (43 percent) – followed by innovations and technologies (twelve percent of all deals), writes RBK. The Russian construction and real estate sector is also an excellent investment property for foreign investors.

A striking conclusion from last year: gas company Nowatek has sold its shares in the liquefied gas project Artik SPG-2 to the Chinese CNPC and the Japanese Mitsui. In the IT sector: The Russian software developer Luxor was taken over by the American DXC Technology for around two billion dollars. South African Naspers bought the Russian online marketplace Avito.
Ironically, investors from the United States have invested significantly more in Russian stocks: $ 3.2 billion instead of the previous $ 0.2 billion. Investments from Asia to the Russian economy have tripled in 2019: from $ 2.4 billion to $ 8.2 billion. Investments fell from the Middle East (from $ 4.8 billion to $ 2.7 billion) and from the EU (from $ 5.9 billion to $ 2.6 billion).

KPMG experts expect foreign investment in Russia to increase further this year. Investor interest in the Russian energy, innovation and technology sector continues.

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