APKARIAN Aram

After almost 20 years of operation, the Russian stock market continues to be at the level of stock markets in underdeveloped countries. Low levels of protection of minority shareholders eventually has led to a reduced interest from private equity investors in the Russian stock market. To increase the attractiveness of Russia as an investment platform for foreign portfolio investors, it is essential to develop an internal equity market which will provide the necessary investment resources for economic growth and create the foundations for attracting foreign investors. The formation of the domestic share market should start by attracting investment pension funds, insurance companies, public companies and mutual funds. In addition, there need to be developed appropriate tax incentives for shareholders, improved legislative safeguards regarding the interests of minority shareholders, a simplification of the share acquisition process by private investors, diversification of the economy so as to stimulate the rise of innovative activity, reduce red tape, combat corruption and improve the internal operations and infrastructure of the stock market which measures will subsequently help to improve the Russian share market. In this respect, Russia faces the ambitious task of building an effective communications channel with international and domestic investors, the successful implementation of which will largely depend on the prospects of its economic growth.