MOSCOW, Aug 6 (AFP) - Russians have nearly 80 billion dollars "stuffed under mattresses" -- more cash than in US circulation -- which is now trickling into stocks amid improved trust in corporate governance, Russia's securities watchdog chief said Tuesday.
The figure is almost double the Russian central bank's current gold and hard currency reserves of 43.6 billion dollars.
"Our latest estimates show that between 75 and 80 billion dollars are, so to speak, being stuffed under mattresses," Igor Kostikov, chairman of the Federal Commission for Securities Markets, told a group of Western reporters in Moscow.
"Some of this money has started to come (into securities) since May last year," said Kostikov. "More and more, (Russian) individuals are starting to invest."
Russians had long been keeping their savings in dollars, leery of their own national currency after being bitten by a string of devastating devaluations and bank collapses in the last decade.
Yet Russia was also the star performer last year among emerging markets, in large part due to handsome profits reported by its oil and natural gas giants that came on the back of peaking energy prices.
Kostikov thinks some lessons were picked up in those glory days. Oil prices have since sagged but the Russian stock market continued to hold its own until July when it too went into a tailspin along with New York and European share markets.
The Russian market's capitalization has dropped off from 137 billion dollars (141 billion euros) to 110 million dollars over the past six weeks -- although it still represents 70 percent of all volume traded in Eastern Europe, said Kostikov.
"US security fund managers have been quitting (the Moscow market) -- but this really has nothing to do with us," stressed Kostikov.
"The Russian economy is hardly dependent on fluctuations in (Western) stock markets," agreed former presidential economic adviser Vladimir Mao.
"If we pass this period without doing something stupid, there will be a powerful stimulus for an influx of foreign investment into Russia," Mao told the government's Rossiyskaya Gazeta.
Kostikov for his part touted Russia's recent advances in establishing some semblance of the rule of law to the post-Soviet business world.
And he took particular pride in its new "corporate governance code" that provides a 117-page standard for proper relations between owners and managers.
The code would be adopted by companies on a voluntary basis -- but investors will then be able to defend their rights through Russian courts once the code is incorporated in the company's statute books.
Natural gas giant Gazprom was among the first major companies to adopt the code, said Kostikov.
But the code still fails to address many problems -- including insider trading -- that can only be prosecuted through criminal statutes that are not yet a part of Russian law, said Kostikov.
"Foreigners have far more experience using insider information than the locals," said Kostikov, adding he expected parliament to examine the long-delayed legislation this fall.
In part confirming Kostikov's rosy outlook for the Russian market and its ability to absorb some of the billions of loose Russian cash dollars, a poll issued this week put the local ruble as the country's most-trusted currency.
About 37-percent of respondents said they preferred to keep their savings in rubles while 35 picked dollars, according to the Public Opinion Foundation.
However, Kostikov also agreed with the argument that Russian securities were reviving in part because the country still lacked a functioning banking sector and companies had few other options but to issue shares if they wanted to borrow fast cash.
"The share-issues over the first quarter of the year have been greater than for all of last year," he said.