Tim Gosling in Moscow -

Foreign investment into Russia hit over $60bn in the first half of the year compared with $23.4bn seen in the same period in 2006, figures from Rosstat showed on August 15.

Between January and June, FDI soared to $15.837bn in January-June, portfolio investments more than doubled to $1.1bn, while other investments rose to $43bn, according to the statistics service.

Despite relations with Russia that are strained to a greater degree than at any other time since the Soviet days, the UK leapt to the top of the charts, pumping over $15bn into the country, replacing traditional leader Cyprus – a favourite offshore hub for Russian companies.

However, the Mediterranean island remains the largest point of entry in terms of accumulated investment, with the favourable tax locations of Netherlands and Luxembourg coming in second and third.

Meanwhile, Kommersant noted that credits to Russian legal entities from foreign owners setting up operations in the country rose by almost 7 times from the year-earlier period, accounting for more than half of the foreign inflow at $30.5bn.

The paper also noted that for the first time the manufacturing sector topped the list of investment recipients, with $52bn. This compares with $42bn that went into mineral production and $48bn into industry. Real estate and transportation tied for fourth place with $13.1bn each.

Total investment from abroad for the whole year is widely expected to peak at $70bn, despite reaching almost that height in the first half of the year. This is largely because no further large IPOs or secondary offerings are on the cards, while several were held between January and June, including mammoth offerings from Sberbank and VTB.

In terms of outflow, Russian investment amounted to $39bn, with the most popular destinations being Cyprus, Netherlands, Austria and the UK, accounting for 31.3%, 25.7%, 5.7% and 5.7%, respectively.

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