Investors See Another Putin Presidency as Good for Business

The conclusions, expressed in articles and research notes published recently, appear to reinforce an axiom here that it rarely pays to bet against Mr. Putin on the Russian market.

Since Mr. Putin, the current prime minister, announced that he would pursue a third presidential term, analysts studying Russia through the lens of profits and risks have been writing that the only plausible alternative — that Mr. Putin remain prime minister, with a weaker aide or ally in the constitutionally stronger post of president — would produce political instability, which would be bad for business.

According to this analysis, the reunification of power in the Russian president in both title and practice — even one, like Mr. Putin, who has a track record of abrogating contracts — creates a more predictable long-term outlook for companies like Exxon Mobil, which has just agreed to a major oil exploration deal in the Russian Arctic.

This investment argument in favor of more stable, less pluralistic politics in Russia seems also to reflect the reality that rapid economic development has been achieved in a number of post-Communist countries that never transitioned to democracy, like China.

“Politically, Putin’s decision to return will reinstall a leader with the power to implement decisions and end an increasingly dysfunctional diarchy — if at the cost of hardening Russia’s ‘soft authoritarian’ image,” noted Cliff Kupchan, a senior analyst at the Eurasia Foundation.

“Many observers have emphasized that Putin’s rule may extend longer than Brezhnev’s, and almost as long as Stalin’s,” he wrote in a research report, referring to Leonid I. Brezhnev, who ran the former Soviet Union for 18 years until his death in 1982, and Joseph Stalin, who ruled for 25 years until 1953.

“Predictability will at least in the short-term reassure investors and improve market sentiment,” Mr. Kupchan wrote.

Russia’s main stock index, the Micex, rose 2.5 percent Tuesday, the second day of gains after Mr. Putin’s announcement.

“With less political uncertainty, the authorities may hope that capital flight eases and that some may return capital in coming months to take advantage of cheaper asset prices,” Charles Robertson, chief economist at Renaissance, wrote in a note for investors.

Kingsmill Bond, an investment strategist with Citigroup in Moscow, published a research note over the weekend, “Return of the Master,” that suggested investors would be “pleased that the political uncertainty is over,” though noting that “there is little sign that Putin will adopt the radical change that some had hoped for.” In the short term, Europe’s debt crisis and oil prices will guide the market here more than domestic politics, he said.

Not all economists share the view that less change is better. Laza Kekic, a former Soviet specialist at the Economist Intelligence Unit, said Mr. Putin’s decision to run again for president was “a retrograde, and indeed farcical step, that is incompatible with economic and political progress in Russia” and that after this decision, the country was on the way to becoming a “third-world petrokleptocracy.”

Clouding the picture somewhat of an authoritarian government able to impose its economic will, Russia’s long-serving finance minister, Aleksei L. Kudrin, resigned Monday after Mr. Putin’s announcement. Mr. Kudrin had become the symbol of Russia’s fiscal responsibility.

Mikhail D. Prokhorov, a billionaire who was ousted this month as head of a right-wing political party, wrote in a blog that other economic liberals might follow Mr. Kudrin’s example and resign.

“I think we are on the verge of very important, perhaps tectonic, shifts in the consciousness of the elites, including the power elites,” Mr. Prokhorov wrote.

Other analysts note that companies and investors will now be able to price in political risks whose contours are not likely to change much, as Mr. Putin is poised to remain in power until 2024.

“Western businesses work wonderfully with dictators,” said Mikhail G. Delyagin, an economist and director of the Institute of Globalization Problems, a research concern. “For them, it is hardly a matter of principle.”

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