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Info on the Russian market (13-11-11)

Info on the Russian market (13-11-11)

The current business situation in Russia has been steadily improved since its transition from a centrally controlled planned economy to a free market, though the economic crisis has had a significant impact on the business climate. In recent years, many reforms have been implemented, the tax system has been made fairer and transparent and Russia is becoming increasingly integrated with global markets joining WTO. The customs have improved appreciably. At the same time, the operating environment remains hazardous on a number of fronts; market entry by foreign investors is still low due to poor legal safeguards, as well as high levels of bureaucracy and corruption.
The government has prioritized the fight against corruption. Under the crisis conditions businesses had began closing down their investment programmes, and they encountered difficulties in repaying credit. The main problem especially for small companies is the availability of financial support. There was however an allocation of RUB 18 billion to support small and medium-sized businesses in 2009 and another allocation for RUB 10 billion from the federal budget to support the same businesses in 2010, with a special focus on the innovation sector was seen a major boost to this companies.
Investment Climate 
Russia is one of the world's most lucrative markets in the world as of now. It has however relied so much in the energy sector. This has lead to a low development rate. In the recent years there has been tremendous changes that have stirred investment and created an opportunity for investments. As of now Russia is increasingly becoming considered as a country with a stable investment climate. The country is experiencing a large increase in foreign direct investment inflows over the last few years; this has been as a result of a growth in the home market, rich human capital, abundant natural resources and political stability. The financial crisis that is being experienced in the world especially in the U.S.A and the Euro Zone has unfortunately slowed growth. Legislations that were a constraint to foreign direct investments are being gradually abolished and the regulatory environment has improved.
However, several sectors still remain closed to foreign investment. Among them is a restriction of involvement in the banking sector. The government also has restricted foreign access to some of its strategic sectors of the Russian economy among them nuclear energy, natural monopolies, military and special machinery, the space industry, and subsoil development. As part of the government’s plans to simplify the process by which investors can access strategic sectors, a draft law to moderate foreign investment restrictions in Russia’s strategic sectors and mineral resources was introduced in the lower house of parliament in March 2010. The law is expected to be adopted in the second quarter of 2010.
Russian investment policy includes tax relief, reduced administrative barriers, and developing private-public partnerships. The government has heavily invested in infrastructure projects to promote foreign direct investments. Among the incentives in place are low corporate tax rates and a framework for allowing foreign investment in strategic areas. The government is to lower administrative barriers to foreign investment. First, is introducing a procedure for registering business activities through submission of declarations to the government; second, part of the process for declaring entry to business activities is to be transferred to self-regulating organisations. In addition, the government is making plans to shorten the time it takes for a foreign enterprise to get a permit to carry on its business. The recently formed Department of State Control of Economics is to be charge of removing barriers to foreign investment.
Many foreign companies have shown a growing interest in Russia over the past few years. Most of them are being lured by the new opportunities which, alongside with the high growth rates and the vast natural resources, make Russia's markets very attractive. There is a general influx of international banks and retail outlets, equipment suppliers, mining companies, engineering centres, and research organizations that are entering the Russian market. They all stand to benefit from the unlimited range of opportunities for business development in Russia, and they possess a vast field for the application of their experience and potential.
Putin is still Russia's most powerful politician. He continues to dominate the political system, despite stepping down as president in 2008 to become Prime Minister He is the dominant member of what Russian officials call a ruling "tandem" with Medvedev, a long time associate, whom Putin tapped as his successor when a constitutional limit of two consecutive terms kept him out of the 2008 presidential race.
Medvedev term is coming to and end and there is anxiety as to who will take over from him come 2012. Many analysts and diplomats however expect Putin to return to the Kremlin. Their believe is that Russia will be more stable while he is at helm. Putin, 58, was the pioneer of changes in Russia; he is yet to make it known as to whether he will contest. If he is to return to the Kremlin in 2012 he could rule for a maximum of two terms until 2024. Putin has a unique ability to arbitrate between the competing fractions or clans in the Russian elite and is respected by all of them, no other individual is seen to command the same authority.
Russia has recorded growth in almost all the sector of the economy, oil and gas production, telecommunications, IT infrastructure, and business and software outsourcing just to name a few. Due to these factors multinational corporations have increased their commitment to gain market share in Russia, the largest country in the world. Moscow is the headquarters for most international businesses operating in Russia, has experienced a spike in competition for economic resources, this includes competition for the best and brightest of Russia's talent. As a result the labour market will experience an increase in demand.
This can be contributed to a number of factors. First, the numbers of businesses that have entered the market have opened up so many investment opportunities. The major beneficiaries of this are players in the telemarketing business. This is an area that has great growth potential and has not been exploited as of now. A good example of new entrants is Dania International. It is a Scandinavian company that offers telemarketing, telesales and other sale projects to their clients in countries like, Poland, Lithuania, Ukraine and Denmark. Due to the current market entry challenges experienced in Russia, telemarketing services are in high demand. Dania International is a recommended partner in sales and telemarketing activities. Dania International offers a launch pad from outside Russia to the Russian market. Dania International is a good choice for telesales also. Telemarketing can be an effective tool for your business and it can be an easy and effective way to increase your profits and promote your product or service.
Merits of Using Telemarketing Service
The main advantage of using telemarketing to encourage growth in your business is that it allows you to immediately access your customer's level of interest in your product or service. Additionally, there are a number of other benefits, for instance:
• It provides an interactive and personal sale service.
• It can create an immediate rapport with your customers.
• You can explain technical issues more clearly to your customers.
• It allows you to generate leads and appointments.
• You can sell from a distance to increase your sales territory.
• You can reach more customers than with in-person sales calls.
• You can sell to both existing and new customers.
• The results you achieve are measurable.
Other Consideration When Using Telemarketing Companies
There can be as many downbeats using telemarketing as there are positives. In particular, you need to consider that:
• Telemarketing can be resented especially when dealing with business-to-consumer customers, in particular if the calls are made in the evenings.
• Customer lists may not always be clean and opted-out - this leaves you with a potential risk of breaking the law
• Customer lists can be very costly
• Telemarketing has a negative image that could damage your business' reputation if it is not well carried out.
• Telemarketing has the potential to replace a sales team and this could lead to negative feelings among employees.
• Training staff can be time-consuming and costly.
• You may be required to prepare a script as a guide.
• An outside service provider can result in your losing control over your sales processes because the people doing the work aren't your employees.
Targeting Consumers in Telemarketing
It enables one to target the correct group of customers and potential customers for their product or service by using telemarketing lists. However, you need to obtain clean lists that contain details of those individuals and organisations that have chosen to receive unsolicited sales calls. Any customers who do not wish to receive calls will have joined specialised lists. Even if customers are on preference lists, there are certain ways to target the correct audiences for your products or services. In short is a tricky area that requires the use of an expert. You should therefore go through companies like Dania International who have been in the business long enough to understand the mechanisms. 
Russian Stock Market
The Russian stock market Russian Trading System (RTS) was established in 1995 in Moscow. It consolidated regional trading floors into one exchange. Initially RTS was modelled on NASDAQ’s trading and settlement software. Later on the exchange went online with its own system. It started off as a non-profit organisation, at the moment RTS is in the process of a major reorganisation. The plan is to transform it into a joint-stock company. Data on the performance of Russia Trading System is available world-wide through major financial information vendors.
RTS today offers the best possible entry point into the Russian market for foreign investors. RTS has ensured the goals and needs of a wide variety of investors are met. It takes into account all factors that are important to foreign investors interested in the stock market. Among them is liquidity, reliability, instruments, convenience of applied technologies and the costs of transactions.
RTS Classica Market
It is the oldest organized securities market in Russia, launched in 1995. It offers trading in a wide range of securities – over 500 stocks, bonds and fund shares. It ensures there are top quality instruments whose issuers have met the stern requirements of RTS to information disclosure and corporate conduct.  It also uses a Central Counterparty technology which provides for anonymity in making settlement; this enhances the reliability of operations and extends the market participants’ opportunities including settlement in foreign currency for Russian Federation residents.
The RTS Standard
This is a new front-rank cash equity market based on the high-end exchange technologies employed worldwide. The new market is targeted at a wider client base including professional market participants, institutional investors, hedge funds and individuals. One of the major benefits offered by RTS Standard is the portfolio approach to risk management on the derivatives and cash equity markets. It opens up new opportunities for the participants holding positions on both markets and for arbitrage players in terms of reduced funding costs. RTS Standard is aimed at building up the liquidity of the Russian securities market and boosting development of the infrastructure. The new market has been designed with regard to the current needs of both Russian and foreign investors.
Futures & Options on RTS (FORTS)
It has the widest range of instruments – 47 futures and options contracts on equities, commodities, indices, currency. The financial instruments are actively used by global investors; some contracts are among the most liquid instruments in the world, according to the international ratings. According to reports by financial institutions, FORTS, the RTS derivatives market, holds the 12th position in the top 30 global derivatives exchanges rating.
Applied technologies have been used to ensure trading at the RTS is effective. RTS has implemented such advanced technologies as an evening trading session too. This gives investors an opportunity to trade during trading hours of all global exchanges. Settlement is possible both in US dollars and Russia roubles. Rouble is the Russian currency which is fairly stable. Trader can use a single account to trade in both securities and derivative instruments. This has great advantages to them giving one an opportunity and tools to use various strategies and maximize the effectiveness of the invested funds on both markets. Another technology successfully applied on RTS is FIX protocol (Financial exchange protocol); this is a global standard for exchange of financial data. Today foreign investors can be assured that when trading and investing in Russian assets they get first class exchange service conforming to the highest of world’s standards.
Russia has been on a path of economic growth for four consecutive years. The high oil prices have been the driving factor, the real depreciation of the rouble after the economic crisis of 1998. Given the recent acceleration of the reform process, continuous growth over the medium term is more realistic. Inflation has fallen more slowly than planned in the past years. The central bank has signalled that it will pursue a more active monetary policy. It continues to pursue a policy of nominal rouble depreciation; lately, the pace of depreciation has been less than the inflation gap separating Russia and its main trading partners. Therefore, the rouble has appreciated in real terms against the US dollar and the Euro. All in all the Russian economy is a on a consistent growth trend unlike most of other world economies. An entry in this area is now one that most analysts would recommend. This is because it has not been exploited in the past due to close control by the government. The Russian economy is on a diversification process.
This progressive growth depends on the oil price stability which is still a major source of revenue. The political stability is also a factor that investors will keep on watch. Another obstacle to lasting growth is the still very low number of small and medium-sized enterprises. Removing red tape is a step in the right direction. The new leadership at the central bank is now starting to take action to revitalise the banking sector. It is above all smaller companies that would benefit from efficient financial intermediation. If such sustainable structural reforms can be pursued over a longer period, Russia should be able to move away from its very low level of economic efficiency and start to catch up with its neighbours in Central and Eastern Europe.
There has been a budget surplus in the previous years which is a good thing for the government. This is due to high oil prices worldwide. The country’s plan to lower the external debt is also a plus. The country has been actively servicing its debt and the plan for an agency to manage is long overdue. Russia has in the past succeeded through premature repayments to bring down its debt service which was very high. Agreement with the German authorities for the transfer of rouble debt was very favourable. However such huge write-down’s may not bee seen again due to its budget and current account surpluses.
Conclusion
Russia has relied so much on traditional marketing methods. In the recent past, the world has moved away from this to more advanced marketing systems. Dania International’s entry into the Russian market is therefore perfectly timed to benefit the country through its first class telemarketing, telesales and sales services. They will be the key to unlock the market’s potential. This is definitely a great moment for this sleeping giant to reclaim its share of the world commodity and services market. Adoption of new technologies is long overdue in Russia. Thus, we should then expect many changes in the business environment. Key players in the telemarketing field will also be on their toes to make sure they maximize on giving the clients the best. Unemployment will also be reduced greatly as the entrants into the market source for employees, to the benefit of Russia’s most of her people will be in the front line for employment. This is because Russian is the mostly widely spoken language and hence labour importation may not be there in the short run for multinationals.

Moscow, Russia in winter
 

Dania International S.M.B.A. * Raadhuspladsen 16 * 1550 Copenhagen V * Denmark * Telephone: +45 70272677 * Skype: dania_international * VAT: DK34048142

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