73% of Russian entrepreneurs ready to invest in BRICS - E&Y study

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    AVERAGE INDIAN EXORCIST Senior Member

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    According to research conducted by Ernst & Young, during the next 12 months, almost three in four Russian entrepreneurs are planning to invest in the BRICS countries and just 6 percent want to in the developed markets.

    A new landmark

    In the near future, India and China will become primary destinations for Russian private foreign investment, according to an Ernst & Young study.

    The study found that 40 percent of the companies named China as their top priority. Following China are the markets of India and Brazil. Changes in preferences are associated with an improvement of bilateral relations between Russia and China, which comes amid a conclusion of a number of major transactions, say the study’s authors. Last week, Gazprom signed a historic agreement on gas deliveries to China. India's largest online store Flipkart has already attracted an investment of $210 million from the investment community, whose lead investor was the DST Global fund owned by the ​​Russian billionaire Yuri Milner.

    “Our trade with China during the past 20 years, not taking the crisis period into account, has been growing by 30-40 percent per year, executive secretary of the Russian-Chinese Chamber Sergey Sanakoev told RBC Daily. Investments in India can also explained by market factors. According to the information provided by Macquarie Research, since 2009, the Indian e-commerce market has had an annual growth of 30 percent, and by the year 2015 year, its sales will reach $18 billion.

    General mood

    Another important result of the study – is the general attitude of Russian investors. According to the results, 64 percent of respondents from Russia are optimistic about the outlook for the global economy. While 41percent noted an increased political instability in the world, 27 percent talk about a further slowdown in key emerging markets. However 53 percent are confident in the stability of the global market in the short term, while 65 percent believe that corporate earnings will increase in the near future. 76 percent of respondents believe that the loans will become more accessible and the same number of respondents expects their companies’ revenues to increase this year.

    Using a pragmatic approach promotes such confidence when planning future business development. Thus, 60 percent of respondents consider the reduction of costs a priority and another 36 percent expect an increase in business in the near future. “This study’s results indicate a gradual recovery of confidence in growth prospects for Russian companies as a result of the improvement of both global and domestic economy,” says Ernst & Young partner and Head of Advisory Services for transactions in the CIS Alexei Ivanov. According to him, the difficulty in doing business in Russia “has not only contributed to the cost optimization for companies, but has also stimulated the search for new ways to increase profitability.”

    One of the key indicators of the investment climate in the country is considered to be the Doing Business ranking, which is compiled each year by the World Bank. In 2014, Russia has become part of the three states that are most actively following the path of reforms. The country rose by 20 places and took the 92th position in the new international Doing Business- 2014 ranking. Moreover, for the first time, Russia is among the top hundred in the ranking for evaluating business conditions, beating China (96th) , Brazil (116th) and India (134th).

    73 percent of Russian entrepreneurs ready to invest in BRICS - E&Y study | Russia & India Report
     
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