Spotlight on Russia - Q3, 2013

This commentary centres on market insights within one of our core regional coverage areas, Russia.

Russia’s general economic outlook continues to be on a sluggish growth path.  This is fuelled mainly now by state social and infrastructure projects (budgetary spending) and continuing consumption growth. On the contrary most of the SME investments have stopped and are not contributing to economic expansion of Russia while capital flight out of the country is stabilising but still stands at an expected $70bn for 2013 ($80.5bn in 2011, $56.8bn in 2012).

The formation of "state champions" or heavy players in almost all industries in the country bring market conditions closer and closer to a state-controlled, socially-driven economy with large ministries executing general needs of the state.

The social spending aspect of the economy has become more important for the Kremlin and more difficult to maintain. Current plans for the state budget balance factor in oil prices way above current market levels. As a result, the Central Bank of Russia will have to resort to, and is planning on, further debt-raising at sovereign, federal and regional levels. List in the privatisation pipeline stays rather large but most of the market knows that it will be pushed for much later periods and only when really needed.

A number of state officials throughout this year have expressed that debt is currently their priority and this explains current developments around Central Depository Formation, Euroclear and legal changes which will make it much easier for international investors to invest in local debt and later equity markets.

Masha Yankovskaya – Head of CIS

Masha worked for a renowned international search firm based in the UK from 2011 to 2013. Previously she worked as a Senior Consultant for Ward Howell, a CIS executive search house, for more than a decade.

Masha focuses on banking, finance and private equity fields covering CIS.

Previous banking search experience includes:

  • Multiple Board level positions in leading Russian financial institutions
  • MD and Director level positions in Private Equity funds
  • Executive positions in international financial institutions
  • Board level positions in Asset Management companies
  • Senior executive positions in family offices
  • CRM executive positions in Private Banking

Masha brings deep knowledge of the Russian labour market as well as understanding of international executive search standards.  She has an MBA from University of Chicago.