in the banking sector continues to expand and nobody's doing anything about that mervyn king wake up. iran is due to resume talks with the un nuclear inspectors in tehran this weekend in the first discussions of their kind of more than three years the country's also allowing a senior u.n. weapons expert to be part of the mission iran's nuclear program is the main reason behind rising tensions with the west the most recent move to see the e.u. adopt a complete ban on iranian oil imports from july but tehran's considering heading off the sanctions by cutting supplies to europe as early as next week global policy consultant son manju told r.t. that by threatening to turn off the tap iran's hoping just hoping to soften the impact of sanctions the calculus from iran's perspective is going to be if they preempted by cutting exports the forward to july first date the e.u.

has set for cutting the exports and iraq preemptively cuts its three four hundred thousand barrels with the exports to the e.u. would be able to drive prices up enough by doing that to offset for that you know right now what is going on with iran is that they there is an existential threat to the government there and quite frankly from the u.s. perspective i don't think there's a lot of hope that these sanctions will actually get you want to stop its nuclear program think the real unwritten objective here is quite frankly and call it by different name but it's regime change ultimately they want to put as much pressure that as they can on this government. but taking a look at some other news from around the world the supposed leader of a violent nigerian is the mess that boko haram is threatening to kill more security personnel and kidnap their families in an audio recording he also accuse u.s. president barack obama of waging war on islam a week ago the group killed more than one hundred eighty people during

a gun and bomb attack in the northern town boko haram once a real law more widely in force throughout nigeria. police in senegal have fired tear gas at demonstrators rallying against a court decision to allow their president to run for a third term protesters then threw rocks pro-car case and started fires the president's candidacy was in question because the constitution changed in two thousand just after he took office to impose a two term limit believes the law doesn't apply to him because he was elected for it came into effect. by the ski slopes of sochi are in a place are in place i should say for the next winter olympics now comes the test to make sure they meet world class standards while the russian resorts facilities are hosting their first skiers in organizers hope it's all downhill from here as dennis below this but lots of say explains. it's slow we unschool to the

caucasus mile but it's the hardest time for. this couple romas for a superior for the season's grand opening in sochi it's not that. it's thirty's moving a month ago so much snow we wanted to write still barely knew we had. super this is also cool to a brand new resort just off the black sea coast but the numbers just plan checked ski fans who might otherwise prefer a winter break in france or switzerland kilometers those tracks will be able to compete with many european resorts it means six to them thousand tourists will be able to ski here because you're on seasonal warm weather lets a few who are in destinations a little high and dry but then stuff here it was i who got to became snowed under with work as skiers sort of new resorts just a. week on the for beautiful. believed and everyone enjoyed.

very positive feedback this morning yes that's true. but they're also those biggest test as yet to come in february and march just about two thousand and fourteen winter olympics it will mean two or just will be strictly on this but for now they're making the most of the snow the freedom and even the romance and the russian winter it's great if there is snow is sort of why you said it was supposed to kiss and that's why when down the hill so if you'll excuse me. but like. sochi. well you might not guess it now in the middle of winter but climate change continues to divide the international community are hard for us ask people in new york how far they're willing to go to cool down global warming. today legislators are introducing more and more bills to help curb the effects of global warming what are you willing to do to help out this week let's talk about

that would you be willing to do not blow dry your hair anymore yes that i'd be willing to do would you be willing to dry your clothes on the line and never use or drying machine i don't know about that though it's about it depends would you be willing to change your behavior like say walking to any destination that's under two miles instead of driving like what i'm doing today is that yes yeah yeah i absolutely absolutely beside your virtual. well it's good what about showering for under a minute. i'm always. pretty much broke sawlogs so the electrical futile a little longer saves money but because the postal is the clock on the mark who are going to do you think most people are willing to change their daily behavior even though i'm a little proud to call it a selfish you know they don't really care about the planet until until it affects them personally unfortunately that's the world we live in whether or not you're willing to change your energy consumption habits now the bottom line is you might

just have to in the future if global warming continues to progress. well the march of the multinationals in india is threatening to wipe out millions of smaller grocery stores while it's likely to mean to pursue a jobs boost the pre-packed food future when generations of local market traditions pressure either discover it. this dry food store has been set the end there saying chalons family for six generations it's one of the many small retail stores that have been operating in this market in old delhi for hundreds of years ago one of the six generations of our family grew financially and provided us with everything but now sing chalons way of life could be at risk after years of pressure of the indian government decided to allow foreign multiband retailers the likes of tesco and wal-mart access to one of the fastest growing middle classes in the world until

now india only allowed single brand foreign retailers like reebok to enter the country even though the indian economy opened up more than a decade ago economists here argue that the country needed at least five years to build up its domestic multi brand retail sector before allowing foreign competition into the country but now politicians argue that it might be the perfect time for foreign companies to enter india's five hundred ninety billion dollar retail sector the politicians behind the push say that farmers can make more money and consumers will pay less for food if the stores are allowed into india these retailers could provide organization to india supply chain by cutting out unnecessary middlemen president obama and other western leaders have also been putting pressure on india to allow their stores to open in the country arguing that they could provide jobs to millions of indians but small business owners still argue that it's an idea that would jeopardize their way of life but what do you think big stores open up small

businesses will not be able to compete with and they will find it hard to survive so this is a conspiracy against us to shut us down and open big shops but we will not allow this to happen in india a lot of what is it the small business will be swallowed by will not like the way small fishes are written by the big fishes in the sea these small family run businesses will be completely destroyed jeopardizing the financial situation of families and children for now however opposition within india has stalled the decision for. being finalized for store owners like seeing chauhan are watching the debate closely wondering if his family's business and the old delhi that he's known his whole life will suddenly change how modern this is an attempt to destroy even livelihood of the businessmen in india but we will not allow this to happen in india resisting outsiders from potentially destroying his family's tradition preassure either r.t. delhi india well minded artsy dog calm we've got the world covered for you and right now but to brontosaurus that's terrorizing the tongues or treating visitors

at the australian natural history museum but some of the kids clearly want their history a little less vivid and we've got the prius are a panic online for you also. locked off and over look the american harassed for drink driving but held in solitary confinement and denied to the doctors for two gears without trial this story is that artsy dot com. on the back of the headlines here in artsy after a short break stay with us. on

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banking. world's leading. science technology innovation hall the list of elements from around russia we've got this huge earth covered. wealthy british style. that's not on the title of the times we don't. market why not. come the. find out what's really happening to the global economy with much stronger for a no holds barred look at the global financial headlines tune into cars a report. it is easy to get.

to meet. with art see it live from moscow where it's four thirty pm to have bonds russell says i will not support the new u.n. resolution on syria drafted by the e.u. and arab states slamming it as unacceptable moscow says the document targets regime change and paves the way for possible foreign intervention. protesters in poland found to continue fighting the international anti web piracy pact and their politicians to support the notorious trade agreement not to say it allows

governments to police their. under the guise of protecting copyright. and yet another blow to the struggling eurozone as five nations credit scores get cut including spain and italy e.u. leaders and finance experts are struggling to find a solution to the deepening debt crisis at the world economic forum. next artie's on the money explores whether it's risky to invest in russia amid the presidential election plus how to keep the blood pumping in the moscow markets. welcome to the money where the business of russia is business i'm peter lavelle russian equities how will they fare this year what sectors in companies are attractive is the russian market a bastion of stability in a turbulent world and what about the issue of political risk.

to discuss this i'm joined by our key post he is head of macro economic analysis and research at unicredit bank russia heiress he is the editor in chief of business new europe we also have david kranz feel he's a partner in c.m.s. and simon sent him fletcher he is a portfolio manager with renaissance asset managers ok out of time i want to go to you first in china it's the year of the dragon will this be the year of the bull for russian equities we think so we expect quite a significant growth rate of the russian equate is for this year at about two hundred twenty five percent or something like of. things of this year can be quite strong in terms of its fundamentals as well ok even even when. i agree i think the market is extremely cheap and why cheap well because i want to get it december ok write a cheap it's cheap i'm in for a number of reasons i mean of course we were doing our outlook and never has been so confusing i mean you've got

a potential meltdown in europe and at the same time domestically this sort of resurgence of political risk such as it is consequently investors have all stepped back and waiting to see how it plays out and again with the presidential elections in march i think a lot of people are waiting until that's passed and then then they should come back because if you look at the fundamentals in terms of price to earnings it's very very cheap it has to be live by well there are a lot of unknowns but i mean if you're if you're fairly confident there's not going to be a mother in europe western europe then you know you're looking at minimum twenty five percent and some of the other brokerages talking sixty percent returns this year and it depends on the you know if you compare it to oil prices ok you get your covering to me. like about the euro you know is only an oil prices what about you david i mean you optimistic about russian equities this year and i guess maybe compared to what i think i'm optimistic this year i mean if you look at last year there was a falloff in inward investment in the second part of the year but in the first half

inward investment was very strong we've done some analysis of emerging market now it shows that on a number of deals basis there was a there was a very good climb during certain the first half of last year so it shows that the fundamentals are good interest in russia is there and although there was a telling off in the second half which may be for a variety of reasons and probably to do with western european sentiment largely there's no reason to suppose that that that that trajectory wouldn't continue this year once as others have said the political stability position becomes clearer ok we'll talk about political stability a little bit later simon i mean when you look at the emerging market world where do you put russia's top bottom in the middle. well i mean russia is not my island i mean it is without well within the globe the global economic sphere and should the rest of the world i mean you mentioned europe take a tanking russia washer will be severely affected. russia is unique in. the global markets perceive it to be. much more of

a corporate governance discount it's often the political risk is of often seen to be huge whereas i fundamentally agree with ben you know the the opportunities for russia are quite large i mean we see fundamentals giving to a pointer to a large cyclical rebound ok i do too much if we were to look at sectors and companies what sectors do you think investors are most interested in this year in the equity market and i know there's a lot of issues like oil prices and things like that but a bit taken in consideration all these issues what sectors are attractive well preferred these are sectors that are oriented on domestic demand so first of all the telecommunications this is because you're a psychic also as we are more neutral on banks. where positive funds are going to cations are up then what about you well looking across what everyone's saying for this year is very much going to be a year of two harv's and in the beginning of the year while europe deals with its

problems all the banks are recommending defensive stocks you know things like that are not affected by crisis like you know consumer what have you and then the second half of the year should be when we sense go forward you know go back to the fundamentals and then people are talking about value stocks growth stocks things like spare bank redisplay companies that should do well as the economy picks up but more importantly as the sentiment you know as this fear there's dogging everything at the moment starts to fade so you are an easter is you know russia's market is extremely seasonal so typically around easter there's a switch when the new money comes in the new allocations come in and the anime should pick up from that point and i think everyone will be switching but it also. the point we'll see fresh money coming in from outside the camp david what do you think about that i actually came across the same thing everyone's looking at this year's two halves ok wait and see first half second half should be a lot more growth what you think about that i think the wait and see thing is an obvious factor for this year because of the because of the environment we're in i

think that the consumer market is i think widely recognized as being the big opportunity there is consumer debt inflation is very very steady coming down so i think that the consumer market is going to be the main opportunity . ok so i mean i mean it when you look at what's going on here i mean you're talking about the domestic story here are you just as confident about that i mean again all things being equal we don't when we look at the eurozone we look at the problems with the u.s. economy and we also have an election in the united states well i mean the great thing is i mean the election cycles all over the world we've got to do us we have china obviously we have russia here domestically i mean one of the things that i think we are overlooking is russia has the largest loan growth across across any country we have spare bank with our returns on equity that are phenomenal in comparison with not just russian russian competitors but international competitors so sectors i mean there are some really exciting sectors to to invest in short term

as well as over the over the over the whole year and from from from a wait and see perspective i think we have not overlooked the iranian oil situation and obviously with any spike in oil prices is only beneficial to the russian market as we've seen we had severe outflows of capital last year. have been in flows of capital into gems recently but russia as our underperformed in that of the flows have not been as large as they should have been on a pro rata basis you know it's interesting so when you when you would jump in there because i could say that i was going to ask everybody you know boil price what does it have to do with russia prospects for this year go ahead i mean david mentioned before that there's a prospect of a crash in europe which would bring oil prices down which would hurt russia but i think the chances of an oil spike are also quite high i mean you've got unrest in nigeria you've got a growing tension in the middle east in the persian gulf and if that gets worse then it's going to send oil the other way i mean it remains in a huge on having said that the oil demand continues to rise although it's going to

be relatively flat we're at about ninety million barrels a day but although you see demand in europe is already falling from forty to about thirty five but it's being compensated by the new world where they're up to you know forty five to fifty already and so the new world has to overtake and at the. end of the day this crisis is a european crisis in other words emerging markets are continuing to grow there we're continuing to consume more and more oil and this will give support to the price of this in areas where oil goes to sixty seventy dollars i don't see it i mean i can see. your review probably won't let that happen oh they're going to break even my grocery bill at least eighty dollars and i mean that puts a fairly sort of on it so we know it's going to affect the market there is some downside but it's not a very big drop where is the upside is houston i don't know what about oil prices i mean you can give a very good amount of i would say middle case where we know we have an oil spike

that would have a drop in price here but i mean what prices russia need to keep its equity markets point well for us for this year is one hundred twenty dollars per barrel yeah the pretty high and the reason why we expect the. eye to fall on one hand you're completely right but. there are lots of positive signs from the coming from the china and other countries they continue to grow pretty fast however the the reason why we think that the growth rate of the market could not be that higher as could be expected is that we have lots of issues here inside the country first of all if the european union is the largest trading partner of russia so any kind of problems there will definitely lead to issues in the local markets on one hand on the other hand what we see here is. the growth rate in the oil does not automatically mean growth rate of walk all markets because for instance in two thousand and eleven we

saw a pretty huge of care but all of the counted eighty four and plus billion dollars so this is one of the highest numbers we saw ever in this country and this special this is one of the more than comparable with what we saw in tucson eight in the but it's very interesting david if i can go to you i mean is the oil price issue for russia's equities and economy in general over rated or under rated. i think there's a i don't think there was a direct connection between it was obviously very important for us in the g.d.p. because it mainly accounts for that. i think that it did i wouldn't think it was a major impact on the stock prices in general it is a major factor for russian russia's g.d.p. which is largely linked to that i think there's general confidence in the in the price in the oil price. ok so i mean i think i think it's interesting because i get i going back to what ben said i mean he's kind of even it out when we look at the risk around the world but while prices but because of growing demand it's good him

it balances out more or less right now it's what they think the oil issue should be really kind of lowered is a level issue of importance when we look at russian equities for this year well i mean obviously we have. russian government trying to diversify away from oil and gas i think when the rest of the world looks at russia they automatically lead to the oil price and it's that perception of russia being our oil and gas cut country that now if only for oil prices declining then there's a there's a lack of confidence in investing into into russia which need them we need to move away from that obviously you know we've seen the rise of the russian consumer and the russian consuming comparison with there are brazil india or or china spends huge amount per person i mean the average g.d.p. consumption is over eleven thousand dollars here now whereas china china india it's far below that level when you have been there two points we should remember as well the russian stock market tends to track the oil price fairly closely and we're in a unique position here for the first time that the stock market is trailing behind

the oil price in other words the implies the price of oil of something around sixty dollars in other words stocks have priced in a huge crash in europe already sort of oil prices fall it's already priced in which means is that reality closes between the price of play we're going to continue our discussion of russian equities after a short break we'll continue stay with r.t. . discovery. communicate with you want to. test yourself and become free.

see what nature can give you. to be so much brighter if you live out song from songs to pressure. down totty dot com. welcome back to on the money on peter all about what's continue our discussion on the outlook of russian equities in two thousand and twelve but first let's have an overview of the russian market. and that is to run into about the future mood on the notion equity markets experts predict that the main economic indicators will

reach all time highs as the markets get back on track for steady cranks in two thousand and twelve however not everything is raese for the russian market after the recent protests on the back of the parliamentary election some investors pulled an estimated eighty billion dollars from the country that is equivalent to about ten percent of the russian markets diminished capitalization as a result they're able to dominated my six has fallen by more than ten percent and the dollar is nominated m.s.c.i. russia index has fallen by thirteen percent since the election traditionally cheap because of its reliance on oil and minerals explodes russia has grown even to. still it's equities and our fishing less than five times earnings however such low price multiples likely mean that major sell off swing. and as long as international oil prices averaging roughly one hundred dollars a barrel russia will continue to find itself in a better position than most the combination of high oil prices and rising

government expenditures suggests that russian stocks could be set to rally next year. we should make the russian market convenient for equity issuers and create technologies that will make investment easy and convenient for the domestic investor in this sense the exchange should become a center of self-regulation and involvement in the establishment of financial markets together the stock markets of brazil russia india and china have all the s. and p. five hundred index by more than four to one in the past decade and their economies have grown four times faster than america's and stop contras to russia and the other breaks the us and european economies are presumably headed for another year of stock market volatility high unemployment banking industry and people and we causing greater that. can be something for a floor. in places like russia because of difficulties newest united states and europe clearly doesn't twelve is likely to be very careful will be ready for that

because the going to be a lot of the economic but also political certainty in both e.u. and the states are ready to lecture us in the states or france or other places is one of the few fully functional economies left in europe russia is poised to see foreign investors eagerly jump in the balance on the stock markets make us be tilted in favor of the leading developing countries and should attract more investors to russia the country's economy is their ports back to to grow at a more trick pace their can all make up swing which in some three and a half to four percent in two thousand and twelve and then you do. on the money. ok scumming i'd like to go to you go back to you one of the things we talked about in the first part of the program is the reliance on the price but what about the issue of china and what how much is russian eric was going to move one way or another depending on economic performance in china this year well again it falls in .