7 June 2009 | Russia Economic Scan

7-June-2009

Russia Economic Scan

In this edition: Russia sees economic rebound and more interest rate cuts, Russian economy forecast to contract up to 8%, World Bank says Russian stock rally points to economic recovery, Russia's VEB plans to buy Rostelecom shares, RusHydro shares to trade in London from July - Asia may follow.

Top headlines

Russia sees some economic rebound, more rate cuts

• Russia's economy will contract by less than the 6.5% forecast by the International Monetary Fund as some sectors start to recover and capital outflows slow to around zero, officials said on Friday.
• "We already have some signs of improvement but not across the board, just some companies and sectors," senior Kremlin economic aide Arkady Dvorkovich told Reuters financial television on the sidelines of the St Petersburg Economic Forum. (Reuters)

Russia: the 'island of stability' hits rough waters

• A year ago they strutted proudly at home and abroad and said their nation was an "island of stability" amid the financial turbulence sweeping the world. But Russians in 2009 learned the hard way they too were susceptible to the economic slowdown, with GDP forecast by the government to contract up to 8% this year.
• "No one managed to cover themselves up from a truly global crisis,' Medvedev said during the economic forum in his native city. "Perhaps the only island of stability left that can be described as such is Antarctica," he added. (MSN)

World Bank Says Russian Stock Rally Points to Economic Recovery

• The World Bank is “guardedly optimistic” on Russia’s economy and will publish a revised forecast later this month, said Klaus Rohland, the U.S.-based organziation’s chief representive in the country, in a Bloomberg Television interview today at the St. Petersburg International Economic Forum. The World Bank expects Russia’s economy to contract 6% this year.
• The ruble-based Micex Index of 30 Russian stocks has risen 85% this year. (Bloomberg)

Russia’s VEB Plans to Buy Rostelecom Shares for 230 Rubles Each

• VEB, Russia’s bailout bank, plans to buy OAO Rostelecom shares for about 230 rubles ($7.45) each, Chairman Vladimir Dmitriev told reporters in St. Petersburg.
• The deal may happen before the end of August, Dmitriev said at the St. Petersburg International Economic Forum today. KIT Finance, a brokerage with about 40% of Rostelecom, Russia’s biggest long-distance phone operator, agreed to sell its stake to the government to avoid bankruptcy. (Bloomberg)

RusHydro Shares to Trade in London in July, May List in Asia

• OAO RusHydro Chief Executive Officer Vasily Zubakin said Russia’s biggest hydropower producer expects to list its global depositary receipts in London in “early July,” which may be followed by trading on an Asian bourse.
• The state-run company is allowed to have 14.7% of its stock traded in the form of GDRs, Zubakin said today in an interview at the St. Petersburg International Economic Forum. Less than 2% of RusHydro shares are held as GDRs now. (Bloomberg)

Source: Russia Economic Scan