Russians full of optimism in Davos

DAVOS: What a difference a year makes.
Twelve months ago, the mood of the Russian delegation at the World Economic Forum (WEF) in Davos was distinctly gloomy, with oil prices near 12-year lows below $30 per barrel and Western sanctions depressing their economy and financial markets.
Since then, however, Russian stock and bond markets have risen about 50 percent, boosted by rebounding oil and — more recently — expectations the new US presidency of Donald Trump will ease the sanctions imposed over Moscow’s actions in Ukraine.
Russian officials and company executives at the forum attended by the world’s political and business elites in the Swiss Alps this week were far more bullish, with many predicting the markets rally would continue this year.
“This is one of the most positive forums in the last few years. Today our Western counterparties — bankers and investors — can talk freely again about investments in Russia,” Andrei Guryev, chief executive of fertilizer giant PhosAgro, told Reuters on the sidelines of the forum.
Russia’s economy is still in the early stages of a recovery. There are, however, promising signs after more than two years of pain. Oil — a crucial source of revenue — has bounced back above $50 and Russian manufacturing expanded at its fastest pace since 2011 in December, a sign the economy is starting to grow again.
And then there is the Trump factor.
The US real estate mogul won the election on Nov. 8 after a campaign that included pledges to improve ties with Russia, and this week — days before his inauguration as president — he proposed offering to end sanctions imposed on Russia over its annexation of Crimea in return for a nuclear arms reduction deal with Moscow.
“The easing of sanctions will reopen cheap foreign capital markets again for Russian companies,” Guryev said. “It will stimulate local business, allow the central bank to cut interest rates and as a result spur Russia’s GDP growth.”

Meeting Trump adviser
A year ago in Davos, Dmitriev — an influential executive with close ties to the government and the Kremlin — met Saudi Arabia’s representatives and was the first Russian official to predict that Moscow and the Organization of the Petroleum Exporting Countries (OPEC) could reach a deal to cut oil production.
Moscow agreed to cut output in tandem with OPEC last month.
This year, Dmitriev met Anthony Scaramucci — a former US hedge fund manager who will become a White House adviser and public liaison to government agencies and businesses — on the sidelines of the forum.
Dmitriev’s $10 billion sovereign wealth fund was put on one of the US sanctions lists, one which however does not strictly prohibit US persons from dealing with it.
“I cannot discuss sanctions... As far as the meeting is concerned, we have a feeling the new administration is ready to support business and economic contacts between Russian and US companies. This is an important step toward mutual understanding,” said Dmitriev.
Russia figures among the top picks for 2017 trades for Deutsche Bank, Goldman Sachs, UBS, JPMorgan, Rabobank and Bank of America Merrill Lynch among others, with Goldman predicting it “to move from a recovery to a growth phase.”