With $420 billion in foreign currency in its coffers and another $18 billion invest internationally, Russia is ranked third among emerging market investors. But CNBC’s Margaret Brennan reported that unlike other emerging economies, Russia isn’t using its sovereign wealth fund to buy pieces of American corporations. Instead, it’s investing in Russian companies so they can buy American firms. And right now, the focus is on steel.
From Evraz’s $564 million acquisition of Claymont Steel to Severstal’s purchase of Michigan-based Rouge Industries, these new capitalists armed with cash and a favorable exchange rate are making the most of Russia’s boom and America’s garage sale.
Brennan said the CEO of Russian-based Mechel told her he’s openly looking for acquisitions in the iron ore, steel and nickel spaces, as is Severstal, which already has 20% of its global business in the U.S.
But it’s not easy to play many of these Russian companies, which trade mainly overseas as ADRs. Tim Seymour noted Mecehl trades in the U.S, as do some other non-commodity Russian stocks like Mobile Telesystems , CTC Media , Vimpelcom and there’s always the Russian ETF.
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Trader disclosure: On Jan 30, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Finerman's Firm Is Short (IJR), (IYR), (IWM), (SPY), (MDY), Finerman’s Firm and Finerman Own (CROX), (HD), Finerman Owns (CROX) Calls, Finerman Owns (GS), Finerman’s Firm Is Short (LEH) and Owns (LEH) Puts Finerman’s Firm Owns (MO), (SUN), (TSO), (VLO), (WMT), (YHOO); Najarian Owns (AAPL) Calls, Owns (C), (CSCO), (ETFC), (MCD), (MS), (MSFT), (XLF), (RMBS), Calls, (YHOO) Calls; Macke Owns (ATVI), (YHOO), (DIS), (INTC)
Tim Seymour's firm Seygem Asset Management Owns (CTCM)