Russia and the economy, along with the related exchange traded fund (ETF) have been on a healthy run of success, naturally.
As one of the largest land masses on the planet, the share of natural resources is more than abundant, and this quarter brought on an 8.5% expansion, reports Billy Fisher of The Street.
But how much of this is going to remain accessible to foreign investors? Today, Russia put down official limits on the sale to foreigners of shares in strategic and raw materials companies, reports Olga Popova for Reuters.
The new rules go into effect in 10 days, and state that companies involved in geological exploration will see the tightest cap, only being allowed to sell 5% of their shares abroad. For other companies, the limit is 30%.
Market Vectors Russia (RSX) gives investors well-rounded access to the lucrative areas of the country. There is heavy exposure to oil and gas companies, as well as commodities. It is no secret these are the sectors that are driving the success of the country, but be warned the investment comes with substantial risk because of the concentration in commodities; 41.9% is weighted in oil and gas, and 23.4% in iron and steel.
Business conditions are always subject to government takeover, or a successful company may be penalized for a random reason. Business interest and activity continue to grow despite this. Telecom is another area that is bustling. RSX gives 12.5% to telecom, and two of the largest providers have seen their stock prices appreciate 400% and 800% in the last five years. The major factor in this growth has to do with the shift away from landlines.
RSX is up 0.3% year-to-date, but the country might be headed for a slowdown after a strong start to the year. Consumer prices are up 15.1% from a year ago, says Edward Hugh for Seeking Alpha, and the government is struggling to bring inflation back down to its target of 10.5%.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.