Thursday
(0)Yet another Russian firm, Rambler Media, a search engine, has listed on the small-cap AIM stock market in London, preferring to hold its IPO in Britain rather than back home in Mother Russia. The story in the Daily Telegraph here gives a fairly sketchy outline of the listing but neglects to explore a possible broader reason for the listing.
Let me have a stab at it. Russian entrepreneurs are turning their backs on their home turf because they are worried about the possibility of their wealth being grabbed by the Russian state. Political risk is driving many Russian-owned firms to run their business affairs offshore.
Perhaps one should call this the "Yukos Effect." In many respects the seizure of the oil firm's assets by Putin's Russian state is not quite the terrible smash-and-grab raid portrayed in some quarters - its owner was a decidely shady character - but it has certainly put a big chill into investors, pushing Russian shares down compared with their emerging market peers.
Expect to see plenty more launches of Russian firms on the British and other western stock markets for a while yet.
Just wait until they have to pay British corporate taxes... it'll make seizure by the RussGov tame by comparison.
What's wrong with Liechtenstein?
Posted by Kim du Toit at June 17, 2005 01:17 AM
Just wait until they have to pay British corporate taxes
Hardly. Russian corporation tax is 24%, British 30%. Corporate taxation in America is actually higher than in the UK by the time you add on state taxes, which of course we do not need to pay over here.
EG
Posted by Euan Gray at June 17, 2005 09:02 AM
You really think Khodorkovsky and Lebedev are entrepreneurs?
Posted by Jacob at June 17, 2005 01:24 PM
Corporate taxation in America is actually higher than in the UK by the time you add on state taxes, which of course we do not need to pay over here
And all of which in reality is much easier to write off and end up paying zilch in the USA.
Posted by Quill at June 17, 2005 03:47 PM
Jacob asks if the two Russian gentlemen mentioned were entrepreneurs. No, and I don't recall saying they were.
Posted by Johnathan at June 17, 2005 03:54 PM
"Russian entrepreneurs are turning their backs on their home turf because they are worried about the possibility of their wealth being grabbed by the Russian state."
You seem to be implying that the Yukos case sets a precedent for seizing the wealth of entrepreneurs rather than, y'know, criminals.
Posted by Jacob at June 18, 2005 03:16 PM
I have a nice line in Russian railway stock certificates, if anyone is interested. All genuine and dated 1914 - 1920.
I believe they are quite collectible, and make quite good wall paper for the 'little room'.
Just how gullible are the investing public, - do they learn nothing from history? It seems that the LSE has got itself a reputation as being the place to float a scam! - not really surprising after the Rover debacle.
Posted by vh at June 20, 2005 11:43 PM
