vlad.tribnet.com / Issue #148 / Business / Reading article...

If Primorye wants to attract further investment, companies must better train employees, stress the need for information disclosure, and push for a single legal environment, attendants at a local investment conference agreed last week.

The conference, sponsored by local investment company Portinvest, gathered higher-ups in the economic community to brainstorm on ways to increase the flow of international and domestic funds into the area.

With the Vladivostok Stock Exchange firmly in place, and the Asia-Pacific Interbank's stock market opening up to privately owned shares next month, investors are debating how they can best take advantage of the region's potential.

A few things seem clear.

Companies must be pressured to disclose information to investors. Currently, many joint stock companies do not want to disclose or publish reports which could have an adverse impact on their stock, Chairman of the Federal Securities Commission Maksim Aniskevich said.

"The shareholder wants to know what he or she should do when information changes," he said. A legal system must be set in place that effectively regulates the securities and stock markets. Tax laws change so quickly that many companies are given no room for growth and investors consider long term stock purchases too risky.

The government must be pressured to delegate authority. The Russian government has gotten comfortable with its system of central control, even if it is handled inefficiently. If companies are to succeed, the must have self-regulatory power and greater independence.

"Russia is a country where political principles prevail, not economic ones," said the advisor to Russia's consulate in Hong Kong, Andrei Linenko.

Expecting a "golden autumn," investment company Holding Invest announced that companies are preparing for a mass stock issuance in the fall, hoping to attract more investors into the area. The infrastructure for intensive security trading is already well-established, with secure computer connections and adequate preparation among major investing companies in the area.

Still, Russia's biggest problem right now seems to be stemming the cash outflow, said American Consul General Jane Miller-Floyd. Without high-quality exports, Russia must continue to look abroad. It is crucial that it create an atmosphere that can tip the balance in a market where imports are strong while exports are slim, she said.