More Serious Warning Signs On The Russian Stockmarket

In the April newsletter I suggested that Russia was fast becoming a dangerous place for investors.

The reason was that one of the largest western funds investing in Russia, the Hermitage Fund, was suggesting that some of its investments were plagued by what it referred to as massive state sponsored fraud designed to steal hundreds of millions of dollars.

Now in the last few weeks BP has launched a fierce attack on the Kremlin and its business 'partner' TNK-BP accusing them of acting like corporate raiders. The BP chairman has called on President Medvedev to keep his promises to restore the 'rule of the law'.

Clearly something is wrong with Russia and it's fast becoming common knowledge in the West that doing business there is one hell of a struggle and one which now might not be worth it.

I fully expect this developing trend to continue. One where western investors, regardless of who and how powerful they are, continue to be at the mercy of machiavellian Russian businessmen and politicians who clearly hold the better cards.

If you have money in the Russian stockmarket take note.

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