Today's Live Q&A discussed the situation, outlook and opportunities in Russia

Assessing inflows into Russia, Peter highlighted how inflows of money have already increased this year. Contradicting the widespread assertion that investors are turning to the developed markets, Peter forecast a healthy outlook for emerging markets in 2011 and Russia in particular. The number of IPOs forecast will definitely broaden the opportunity for investors looking to move in to Russia. Peter acknowledged that pricing expectations of companies coming to market are looking aggressive at the moment, but he is expecting better pricing moving forward.

Focussing on the impact of a potential slow down of the China economy, Marcus explained that any change in China is bound to have an impact on sentiment concerning all emerging market economies, Russia amongst them. This is due to China now being such an important economy in global terms.

When queried on the inflation outlook for 2011, Marcus acknowledged that rates are currently high, due to the long lasting impact of 2010 summer droughts and wild fires affecting commodity prices. This will likely cause inflation to rise in the first half of the year, but it will drop down to single figures towards the end of 2011. Russia is used to dealing with high inflation, and since we are currently in a low inflationary environment, any rise in the coming months will not be enough to push Russia off track.

Discussion turned to the increasingly active consumer, since Russia has seen a 64% increase in retail and consumer spending in recent months. Peter explained that since few in Russia have a mortgage, the accessibility of affordable mortgages has triggered an increase in consumer spending. Peter identified the primary beneficiaries of this rise as the real estate development along with construction and materials industries.  Russia should continue to benefit from the ever expanding active middle class with their increased spending ability.

Looking ahead to the 2012 elections, Marcus forecast a continuation in the current ruling elite despite ongoing speculation on the outcome. This spells political stability for the country, which is good news for the extensive privatisation program currently being implemented. Heightened privatisation will be a key attraction to investors outside Russia, bringing in more capital flows.

All signals point to a positive outlook for Russia in 2011. Peter believes that people place too much risk on Russia, but already we are starting to see this opinion change. As ever with the country, the journey is complex but Russia is certainly moving in the right direction.

The next Q&A will take place on the 29^th March, and will focus on China. We encourage you to put this date in your diary and look forward to updating you on yet another exciting investment region.