Gazeta.ru reports on the capital outflow from Russia that continues for the 11th consecutive week. According to the Emerging Portfolio Fund Research (www.epfr.com), during the week that ended on December 19, foreign investment funds targeting Russia were reduced by USD 60 million. This marks the continuation of a negative trend lasting for 11 weeks – since the beginning of October, foreign investment funds reduced their Russian assets by USD 636 million. Most of the outflow during the past two weeks is attributable to long-term investors, which indicates that the loss of confidence might not be confined only to the immediate future.
Foreign funds invested approximately USD 462 million in Russia since the beginning of the year, which is less than the amount of financial investment China attracted during the previous week (USD 670 million). During the last week, foreign funds pulled money out of Brazil (USD 130 million) and Taiwan (USD 105 million), while Turkey managed to attract USD 52 million of capital. Developing countries as a whole registered a capital inflow of USD 4.5 billion in the last week. Foreign investors continue to favor Asian markets, primarily South Korea and China.
Analyists state that the Russian market lacks impetus and that the growth rates in China make Russia pale in comparison. This could cause a negative trend in the Russian stock market in the near term, which is expected to be reversed only in the second half of 2013 should the Russian economy show encouraging signs.