An anti-AIDS drug was found instead

An international business-conference "Russia's investment outlooks for a new presidential term" was held in Davos on March 17-21. Leading Russian and foreign investors, top-managers and owners of Russian companies interested in attracting investments, as well as brokers and bank officials visited the conference.

The business conference was held in Davos on purpose. The famous ski resort is a widely known business center. Davos, situated at the highest elevation of all European cities, is one the best sites for top-level meetings.

Swiss businessmen have become more and more interested in Russia. Over 600 Russian-Swiss joint ventures operate in Russia now. Russian trade with Switzerland totaled $1.7bn in 2003, and accumulated Swiss investments in Russia has reached $1.5bn, according to Russian Ambassador to Switzerland Dmitry Cherkashin.

"Vulnerability to macroeconomic shocks and especially to oil prices is still high, Yury Rovensky, the General Director of the RBC Group, which organized the forum, announced at the opening ceremony of the conference, But one can express with certainty that certain structural changes are ongoing in the Russian economy. These changes make us optimistic. Russia has every opportunities to achieve its main target, namely to increase its capitalization." The General Director of RBC hopes that the Davos forum will help Russian securities become true blue chips.

What should investors await from the government and lawmakers? Discussions on this issue were held after the opening ceremony. "Creating an efficient system of defending the rights of investors is still a high priority state target,' Sergey Generalov, the Chairman of the board of directors of the Association for Protection of Rights of Investors, believes. According to him, despite the investment growth in 2003, the current situation is still complex, as future trends are not fully clear now. Investors are worried about the general unpredictability of Russian economic strategy, risks of de-privatization of the largest Russian companies, which result in the fact that Russian companies remain "undervalued" and prevents the stock market from stabilizing. In other words, investors fear to loose their property. High levels of corruption are still a major problem. And the existing non-transparency of the government just spurs corruption.

Global competition for investments is increasing, Generalov stressed. This competition forces our country to resolve the above-mentioned problems as soon as possible Any delay may affect Russia's investment attractiveness and thus our country might stay apart from those who will benefit from global investments.

Foreign investors are also concerned about Russian businessmen selling their assets. Barclays Capital Chairman Hans-Joerg Rudloff mentioned Roman Abramovich, whose actions are considered to be negative implications by foreign investors. Russian companies do not use financial instruments to attract investments, Rudloff believes. But the situation is changing. Analysts forecast a Russian IPO boom in 2-3 years. General Director of the Aton Capital investment group Anton Kandel expressed this idea in his report "IPOs as a way of providing the Russian stock market with capital funding". According to him, banks, insurance companies, retail companies and players on the agricultural and machinery markets will make their initial public offering soon. Breweries are also hotly anticipated to file for initial public offerings. Tinkoff has announced its decision to carry out an IPO on the national market next year. According to Kandel, the main criteria for a success of the IPO is creating development plans for the long term and enhancing the transparency of the governance structure.

Where to invest in Russia except the oil and gas sector and metals? In the IT-sector, Verysell Group President Mikhail Krasnov believes. According to the Ministry for Communications and Informatization's estimates, the past year was the best for this sector in the past decade, as the sector enjoyed a high pace of growth and large investments inflows. "The Russian IT-Industry expands at a higher pace compared to the Russian economy and to the global IT-sector," Krasnov explained. "These trends are to prevail this year, according to analysts", he added. President of the Russky Textile alliance, Konstantin Volkov, has highlighted the advantages of the Russian textile industry in his report "Enhancing investment attractiveness by industries". The Russian consumer market grows fast and spurs the development of textile production in Russia making this sector attractive for investors. The textile industry has recently grown at a high pace compared to other sectors, as it showed a healthy 30-percent yearly increase in output. This industry still has a room for expansion, as imports are still substantial. Thus, import substitution might help boost the domestic textile market. According to the market research company IRG, the Russian textile industry ranks third behind the fuel and energy industry and the retail sector by its attractiveness for investors.

But the greatest sensation was an announcement by Wimm Bill Dann shareholder David Yakobashvili. He declared that Russian scientists had discovered drugs, which stop the AIDS virus from replicating. Using this drug a HIV-carrier will stop the development of the disease and prevent others from being infected. The drug makes the virus in the infected cells latent. Yakobashvili is now negotiating with scientists on buying the technology and all rights to produce the drug. But before any agreement he is not going to disclose any details.