Ever the nimble opportunist, Rupert Murdoch has sniffed the borsch, tasted the blini and decided to decamp from Russia, a move that coincides with the country’s biggest financial problem since the default in August, 1998.

Billions of dollars have fled the country as foreign investors have sold shares, quit other investments or pulled money out of Russian banks. Russia is facing an enormous credit crunch, which has worsened since it invaded Georgia last month.

The stockmarket is down almost 50% from its peak in May (up to the close of trading yesterday), the ruble has plunged and now the country’s central bank has pumped between $US10 billion and $US12.5 billion a day for most of this week to keep liquidity flush.

The Government has ordered the country’s wealth fund and the national pension fund to support the sharemarket and the currency with purchases, directly contradicting a previous assurance that it would not allow this to happen because it would be highly inflationary.

Russia grabbed the attention of western analysts because of its recent aggressive moves against Georgia and threats to both Poland and Ukraine (which the market has also collapsed after the Government fell). Russia is a major resource country, like Australia, Brazil and Canada; especially in energy like oil and gas.

Plunging prices for oil, nickel and copper, some of Russia’s major exports, have also raised doubts that the country can continue with its strong trade performance: imports are surging and inflation is high.
But the political situation has become increasingly fraught in the past year or so for businesses, even Russian businessmen.

So after his outdoor advertising business was raided by authorities this week, Rupert Murdoch has decided to exit a place he has come to distrust.

The Financial Times and other European media reporting that Murdoch has started exclusive talks with French group, JCDecaux to exchange his eastern European billboard business, News Outdoor for cash and a stake in the French outdoor advertising group.

No price has been put on the deal, but a range of $US1billion to $US1.5 billion was suggested in the FT.

The rationale is to raise cash to exit a business that has been dogged by political uncertainty and fund his pay-TV expansion plans in western Europe. The stake in Decaux would be around 10% and the French group would be close to Clear Channel in the US as the world’s largest outdoor business. Whatever price he gets will be lower than the $US1.6 billion offer from US private equity group, TPG more than a year ago.

But since then Russia itself has changed and Mr Murdoch has clearly lost enthusiasm for the country.

Although this week’s raids were targeted at a single employee, Mr Murdoch last month said in the briefing following News’ 2008 profit announcement that he had grown nervous about the investment in Russia.

“The more I read about investments in Russia, the less I like the feel of it. The more successful we’d have been, the more vulnerable we’d be to having it stolen from us. Better we sell now.”

He’s not alone. Russian partners of the BP energy group have been allowed to monster BP over its involvement in a big Russian oil and gas group. BP and its partners have kidded and made up, but no one seems happy. A large Russian steel company that is listed on the New York Stock Exchange was criticised and berated by Russian leaders, including prime Minister Putin in July.

Part of the problem in the past fortnight has been the drain of liquidity and falling share prices have prompted a flood of margin calls on Russian business people and investors. The value of the Russian stockmarket has fallen by some $US750 billion since the May peak and that (like we have found in Australia) is crunching a lot of fortunes.

Russian President Dmitry Medvedev has ordered the government and central bank to boost funds flowing into financial markets to curb a four-month slump that has seen stock prices fall by half.

“The government and the central bank must do everything they can to ensure that new financial resources enter the market,” Medvedev told a televised government meeting overnight, according to news agencies.

Medvedev’s attempts to calm the market, the second such attempt in two days, failed to stem the fall on the markets. The dollar-denominated RTS index fell another 2.7% Thursday while the ruble-denominated Micex lost 3.7%.