U.S. Top Investor Warns of Russia Stock Bubble
Prominent emerging markets investor Jim Rogers said Russian equity markets were overvalued and could burst “sooner rather than later,” revealing the skeletons in the cupboard of its “outlaw capitalism,” the Reuters reports.
“I wouldn’t put a nickel of my own money in Russia, and I wouldn’t put a nickel of your money there either,” Rogers, a long-time commodities bull, told Reuters by telephone from New York on Wednesday.
“Everything about Russia is one big bubble, and it’s going to pop. It’s going to happen sooner rather than later,” said Rogers, who co-founded the Quantum Fund with George Soros in the 1970s and has focused on commodities since 1998.
“When that happens, people will look around and say, how did that happen? That’s when we’ll find out about all the skeletons in the cupboard.”
The fund manager said the Russian state was confiscating assets and company owners were cashing out via a series of initial public offerings in London.
The Kremlin has muscled its way into big deals with foreign companies under President Vladimir Putin and taken control of strategic industries including oil.
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March 2007.
RUSSIAN INVESTOR ALERT
French holders of Russian government bonds wish to remind all investors that the Russian Federation is still in default today (March 2007) on their estimate of some US$ 80 billion owed to them since the Bolshevik, then the Soviet, and now the Russian Federation governments have all unilaterally repudiated Tsarist debt and refused any form of contact or dialogue with their creditors.
We also wish to remind investors that in its Sep. 15th 2006 report entitled “Governance matters: a decade of measuring the quality of governance”, the WORLD BANK rated Russia’s governance comparable to that of Swaziland, Zambia and Kazakhstan. Russia came 151st out of 208 countries in terms of (…) accountability, quality of regulatory bodies, rule of law, (…). In particular, rule of law (i.e. the courts and the quality of contract enforcement) was judged as effective in Russia as it is in Ecuador, Indonesia, and Bangladesh. Nicaragua, East Timor, and China’s ability to control corruption was judged similar to Russia’s.
Despite these findings, and despite the main rating agencies’ knowledge that Russia is in default on US$ 80 billion of Tsarist debt, Russia is rated “INVESTMENT GRADE”.
French bondholders intend to pursue their claim until full settlement at present value, by any legal means and in any jurisdiction they deem appropriate.
EVERY POTENTIAL INVESTOR IN RUSSIA MUST BE MADE AWARE OF THESE FACTS.
FRENCH CREDITORS OF THE RUSSIAN FEDERATION STRONGLY ADVISE AGAINST ANY FORM OF INVESTMENT IN A COUNTRY WHOSE SOLVENT GOVERNMENT HAS SYTEMATICALLY REFUSED TO FULFIL ITS NATIONAL AND INTERNATIONAL OBLIGATIONS, REFUSES ALL CONTACT AND DIALOGUE WITH ITS BONA FIDE CREDITORS, AND REFUSES TO DISCLOSE LIABILITIES WORTH US$ 80 BILLION.