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Video Roundup: Investing In Russia

Neither the Russian stock market nor its economy quite stack up to the current boom driving their Chinese counterparts, but Russia has been revived by its vast oil and natural gas reserves and there is now little doubt it belongs among the group of rich nations, which convened at the Group of Eight Summit in Germany this week.The energy boom of the past four years has been very good to Russia as well as investors in the Moscow stock market. Though the market is down slighlty this year, since 1999 it has gained about 900%.

President Vladimir Putin -- who has been roundly and rightly criticized for intimidating the nation's small group of oligarchs -- has pushed through important economic measures, including tax reform, which has also propelled the economy forward.

Russia, however, still has transparency and corporate governance issues that may dissuade the average investor, analysts say, and it has fewer multinationals trading on the London and U.S. markets than you might think.

Russia's rising economic fortunes have also emboldened Pres. Putin, who has always wanted to return Russia to the prominent -- and some would argue, ominous -- place it held on the world stage during the height of the Cold War, before the government-controlled Soviet economy -- in particular, its energy sector -- began a steep decline. In recent days, there's been tension and an exchange of words between Russian President and U.S. George W. Bush over the idea of a missile defense shield for Poland and the Czech Republic, ostensibly to protect them from Iran. And that has had a dampening effect on investor sentiment.

Bearish On The Bear

Charlie Morris, manager of Global Trend Fund at HSBC Investments, and Zina Psiola, Russia fund manager at Clariden Leu, discuss the hazards of Russian equities with CNBC's Ross Westgate.

Morris says his firm has no exposure to Russia because of the risk factor and the government's lack of respect for property rights.

Psiola says there are more and more questions about who is benefiting from corporate profits in Russia and that there is a lack of shareholder value. Psiola says investors are better off investing in Exxon Mobil than Russian energy companies.

Business As Usual

Ian Hague, Firebird Management LLC fund manager, admits that tensions between the U.S. and Russia have had an impact on investor sentiment, but advises that investing in the Russian market requires a long-term commitment just the same.

Hague told "Squawk On The Street" that investors are focusing on the wrong thing: "Political rhetoric in Russia has less of an impact on the conduct of business as you might think."

He likes such individual companies such as Lukoil and Gazprom as well as exposure through other economies such as Estonia and Ukraine.

Tune Out The Rhetoric

James Goldgeier, senior fellow at the Council for Foreign Relations, and Alexander Kliment, an associate in Eurasia Group's Europe and Asia Practice, joined CNBC's "Power Lunch" to dispel investor anxiety.

Goldgeier believes Putin's bluster is really designed for a domestic audience, as a balm for Russians' wounded pride. Financiers recognize as much, he said, as thorny relations haven't stopped the flow of business in the vast nation.

Kliment agreed, describing global business and politics as "two different voices" -- and the "political noise" hasn't dampened investors' "bullish interest." Surprisingly, he said even foreign energy companies are interested in Russia -- despite Putin having nationalized many energy assets and producers like oil giant Yukos, and the Russian government jailing Yukos' ex-CEO Mikhail Khodorkovsky.