Analyst ties higher investment availability to poverty reduction

Poverty reduction may be caused by higher availability of investments and growing retail investor demand for various assets, said Dennis DeBusschere, founder, president and chief strategist of 22V Research at VTB Capital’s “RUSSIA CALLING!” forum.

“Democratization of investment and consequent poverty reduction should follow a long-term approach to asset selection, because the whole world gets access to various assets, and if people make correct choices and hold assets for a long time, it would be right. If investments become a way of gambling, then of course, the effect would be reversed, and then poverty levels could rise”, — he said.

According to DeBusschere, people from different classes with differing incomes should choose relevant assets. For example, the expert said that young people have higher risk appetites and prefer assets with the highest returns.

Yesterday Russian President Vladimir Putin instructed the government to develop measures for protection of retail customer funds invested in securities. Particularly, he proposed to introduce personal income tax deductions for long-term investments into Russian securities. Furthermore, the President requested to consider options for state co-financing savings of retail investors resulting from share sales.

In 2020 exchanges saw an inflow of customers caused by the reduction of the key rate to the historic minimum of 4,25%. According to Moscow Exchange, the number of such investors over the last year went up by 5 million customers up to 8,8 million. This increase topped the total amount for all previous years. By results of this October the number of retail investor broker accounts at the trading platform reached up to 25 million. As VTB reported yesterday, the volume of funds at investment accounts of Russian currently makes up about RUB 9 trillion.

According to Rosstat, in the first half of 2021 there were 19,1 million people in Russia living below the poverty level — 13,1% of the population. Over the same period of last year there were 19,4 million of these people, which equals 13,2%.