The investments of Estonians to the so-called PIIGS states – Portugal, Italy, Ireland, Greece and Spain – have increased, reaching nearly EUR 1.3 billion at the end of March 2011, which forms nearly 8% of all Estonian foreign investments, LETA/Postimees writes.
For example a whole 663 million EUR has been invested from Estonia to Italy while investments to Greece amount to some 28 mln EUR.
Eesti Pank’s statistics show that debt crisis has not made Estonian investors flee from problematic states. As compared to the time right before the debt crisis, the end of 2009, investments of Estonians to PIIGS states have increased by 58% while the growth of all Estonian foreign investments was 33%.
Investments to all PIIGS states except Greece grew. Investments to Greece have decreased by a half as compared to the end of 2009. Although the debt crisis is becoming more intense, investments to all PIIGS states grew as compared to the end of last year too.
Two examples of companies that have not been scared by the debt crisis are Bigbank and Admiral Markets. Bigbank opened a branch office in Madrid, Spain at the beginning of the year. Bigbank’s Board Member Targo Raus said that the decision in favour of Spain was made among other things because of the big population figure of the state and the local banking that was affected by the crisis.
Admiral Markets is preparing to expand to Spain and Italy. In long term perceptive the firm plans to expand to Latin America and it is easier to do that via Spain, said the firm’s sales and marketing manager Milana Reinson.
Katrin Rahe, Swedbank Investment Funds Fund Manager, said that PIIGS states face different problems and thus they have to be looked at separately when investing. Two simple aspects that help investors to get an idea of the market are interest levels of the states’ short and long-term bonds and the exchange rate of the euro.
Estonian economy and communications ministry does not call Estonian investors to flee from the debt-crisis ridden states either. “It might offer good entrance possibilities for more risk-favouring investors when they can evaluate their risks reasonably,” said the ministry economic analysis service expert Karel Lember.