Investments originating from legal entities based in Uzbekistan saw a surge in the stock market of Russia, marking an increase of 86 times in 2023, which now surpasses RUB 1.3 trillion (nearly $14 bn). This figure doubled compared to the preceding year, indicating a burgeoning confidence in the Russian market.
Legal entities hailing from Uzbekistan contributed significantly to this surge, with investments totalling RUB 86.5 bn ($935.8 mn). Remarkably, this figure starkly contrasts with their initial deposits, which amounted to merely RUB 1 bn ($10.8 mn) at the start of the year.
International comparisons
Uzbekistan finds itself trailing slightly behind the United Kingdom, with investments totalling RUB 87 bn ($941.2 mn). However, countries like Cyprus and the UAE have showcased even more substantial investments, with the former holding approximately RUB 500 bn ($5.4 bn) and the latter RUB 120 bn ($1.3 bn) with brokers in Russia, respectively.
The Emirati companies demonstrated remarkable growth, increasing their share by 15 times over the year, marking the highest absolute growth. Similarly, jurisdictions such as Belize and Panama saw substantial increments in their assets, with Belize doubling its investments to RUB 62 bn ($670.7 mn) and Panama increasing by 14 times, reaching RUB 35 bn ($378.6 mn).
Market dynamics
While the resurgence in foreign investments is evident, the activity of non-residents in the Russian stock market remains below pre-conflict levels in Ukraine. In 2021, non-residents' assets approached RUB 3 trillion ($32.4 bn), indicating a significant disparity.
Brokers observe a gradual return of non-residents to the Russian market. Alexander Tsyganov, Deputy Head of Cifra Broker, attributes this resurgence to the market's underestimation and its gradual recovery post-2022.
Factors driving interest
Anna Kokoreva, an expert from "BCS World of Investments," identifies the diminishing investment opportunities in other countries as a key driver behind the growing interest in the Russian market. Additionally, the surge in demand for equities is fueled by the new IPO Boom, while high interest rates are bolstering investments in bonds.
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