The Conservative Cave
Current Events => General Discussion => Topic started by: megimoo on April 22, 2008, 07:16:55 AM
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Russia wants to buy western companies with oil cash...
Russia looks at all options to invest its oil billions abroadChristine Buckley, Industrial Editor
Russia could soon follow the Middle Eastern sovereign wealth funds and invest billions of dollars in direct overseas investments if, as expected, its national welfare fund is given more freedom to invest.
Dmitry Pankin, Deputy Finance Minister, said that there was hot political debate about how the fund should be invested. He told The Times: “It is possible to invest ... abroad . ..to buy corporate bonds ... to buy shares. It is less risky to buy government bonds than to buy corporate shares. But we are analysing all proposals.â€
Russia is awash with cash largely because of soaring revenues from its oil and gas. But the country is also struggling with inflation as the economy grows rapidly. For that reason, it is now having to limit government spending on infrastructure even though much of its transport network and other parts of its national framework badly needs to be upgraded.
Mr Pankin said that revenues from the spiralling oil price was “manna from heaven†but that it should be regarded separately because it would not last for ever.
Last year, Russia divided its huge stabilisation fund - large amounts of which have been used to improve its networks - into two. It kept the biggest part, more than $125 billion (£63 billion), for a reserve fund and put more than $32 billion into the national welfare fund. This fund will be capped at 10 per cent of GDP but it is expected that it will be able to make riskier, and potentially better rewarding, investments.
http://business.timesonline.co.uk/tol/business/markets/russia/article3792071.ece
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Everyone wants to invest in the US, yet the sky is forever falling on our economy.