Unwinding Political Risk at News Corp

Posted by Bull Bear Trader | 9/12/2008 08:17:00 AM | , , | 0 comments »

Interesting Telegraph (London) article regarding a decision by News Corp. (NWS) to consider pulling out of Russia after learning that the offices of its outdoor advertising firm were raided. As stated by Rupert Murdock,

"The more I read about investments in Russia, the less I like the feel of it. The more successful we'd be, the more vulnerable we'd be to have it stolen."
As Russia continues to generate crude oil revenues, capital available for investment will grow, as will interest in investment opportunities. Yet, experiences such as the one encountered by News Corp, along with recent confrontations with Georgia, will certainly cause some to questions the risk-reward of any such investments. As more companies consider managing risk, including political risk, the BRIC may start to become the BIC. Regardless of opportunities, companies are nervous about taking on any unnecessary risk. The News Corp decision may be just the beginning, with more countries than Russia being affected.