Now, This Is Interesting…

MarketWatch.com’s Polya Lesova reporting from Davos, Switzerland:

The $10 billion Russia Direct Investment Fund plans to announce three deals in the next month, the chief executive of the Russian government’s private-equity vehicle told MarketWatch in an interview on the sidelines of the World Economic Forum’s annual meeting.

The deals will be the first for the fund, which was created in June 2011 and will be capitalized with $10 billion from the Russian government over the next five years. It’s mandated to co-invest with international investors in an effort to attract investment to Russia.

The main industries that this fund will be focused on are financial services, logistics, healthcare, electrical utilities and agriculture. We think something’s missing from this list… and that’s a shame.

The fund is expected to be involved in 15 deals over the next three years, and we hope more than one of those deals finds its way into the energy and infrastructure arena – not just electrical utilities. There are some major deficiencies in this sector that could really hamper growth.

Here’s an article I published right around the holidays on the subject.

Portuguese Power Grid for Sale

Any takers?

Portugal’s state-owned power-grid operator REN is selling 40% of itself to the private sector. Two suitors have already stepped up to the plate with significant offers: China wants to buy 25% of the company and Oman wants to buy 15%.

Both countries have put in bids with big premiums relative to yesterday’s closing price. China’s bid includes a 40% premium, while Oman’s bid is 30% higher than the previous closing price.

This is huge.

Earthquake in Turkey

Eastern Turkey was rocked by a 7.2-magnitude earthquake today, reports the Associated Press. The Kandilli observatory’s seismography center says the quake could have killed up to 1,000 people.

In Van, the nearest city, 10 buildings fell down. The town of Ercis, which is on the fault line to the north of Van, saw between 25 and 30 buildings collapse.

 

Latin America in a Blender?

One of the reasons I love our annual summit conferences is hearing questions from our attendees.

This year, I presented the idea of using emerging markets as a financial survival bunker. I had enough time to answer some great questions from the audience.

None of the countries I talked about in my presentation were in Latin America. A couple people were wondering why I didn’t pick a stable market like Chile, or a growth powerhouse like Brazil. There wasn’t one answer… These two countries are very different.

Chile has been an economic anchor in the best sense of the word. It has handled its balance sheet really well compared to other Latin American countries. In fact, Chile is the only South American country to be a member of the OECD, which it joined in May 2010.

GDP growth has averaged 4% a year since 1999. A major contributor is exports — they make up about 25% of the country’s growth.

But we’re starting to see some trouble in the political sector.

Double-Digit Gains in “Emerging” Markets

I want to tell you how to invest in emerging markets without investing in emerging markets.

Emerging markets are hotbeds of growth, but that’s not always reflected in country-based ETFs. How do you capture the gains of foreign direct investment? It can sometimes take years before that money translates to investment opportunities.

And it’s a “risk off” environment right now. With the markets struggling to find support, fear is driving investors back into gold. This precious metal was up more than 2% as the major U.S. indexes were down more than 2%.

Europe and Asia didn’t fare much better.

That means investment money may be flowing out of emerging markets and into investors’ mattresses. But some up-and-coming economies have cash of their own, and they have lots of projects in the works.