October 26th, 2011

Russia’s retail investors experience Soviet-style service

Nadia Popova and William Mauldin write in the Wall Street Journal about a Norilsk buyback program that has left thousands of Russian investors out in the cold – literally – as they’ve waited in line for hours to tender their shares. These types of obstacles tend to be common for the emerging investing class:

Even as semi-occupied skyscrapers rise up in Moscow’s new financial district, in hopes of luring large numbers of institutional investors, the country’s individual shareholders and bondholders face logistical issues ranging from required hand-delivered paperwork to limited redress for disputes with brokers or trading partners.

Retail investors often face bureaucratic red tape, and few are prepared for the volatility inherent in the Russian market, which has fluctuated between being the world’s best- or worst-performer in the past decade.

According to Alfa Bank the estimated number of investors participating in the buyback program has dropped from 60,000 to 18,000 due to “constraints at the registrar’s office [that] reminded us of lines that formed in the late 1980s for fresh food.”

Full article here: http://professional.wsj.com/article/SB10001424052970204777904576651081541236992.html.

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