How the Russian bear has mauled investors

Russian stocks are on the slide and the Kremlin is making ominous noises about the energy industry. And while there is some good news coming out of Russia, it might be a rocky ride.

The bear is baring its teeth again in Russia, and in more ways than one. The RTS index is now in bear-market territory, down over 20% from its May record peak, with the slide accelerating in the past few days as political risk has flared up again. The dispute between BP and its Russian partners in the joint venture TNK-BP has turned ugly. The venture's chief executive, Robert Dudley, has left the country, citing uncertainty over the status of his work visa and "sustained harassment of the company and myself".

While the government has said it will not intervene, the upshot of this latest "bear bites man story" is that a "Kremlin-backed energy giant" is likely to take control of the venture, says The Wall Street Journal. Prime minister Putin has previously shunted aside other big players, such as Yukos's Mikhail Khodorkovsky he was imprisoned and the company broken up in his quest to "Kremlinise" oil and gas wealth.

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