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

31 May 2009 | Russia Economic Scan

31-May-2009

Russia Economic Scan

In this edition: Russia to discuss WTO entry with EU and US, Arctic may hold 30% of undiscovered gas, Russia's VTB will peg management bonuses to stock price, Ruble extends biggest monthly rally since 1995, Russia's Svyazinvest plans IPO after reform.

Top headlines

Russia to discuss WTO entry with EU, U.S. next week

• he European Union, the United States and Russia will hold detailed ministerial talks next week on Moscow's bid to join the World Trade Organization, diplomats said on Friday.
• "This is a shift from the technical level to gauge the temperature at a high political level to see if the outstanding issues can be resolved soon," a diplomat familiar with preparations for the talks told Reuters. (Reuters)

Arctic May Hold 30% of Undiscovered Gas, Strengthening Russia

• The Arctic probably holds 30% of the world’s undiscovered gas and about 13% of the oil, a group led by Donald Gautier of the U.S. Geological Survey said in a paper published in the latest edition of Science magazine. The study was billed as the first detailed estimate of the region’s natural-resource wealth.
• “These findings suggest that the future preeminence of Russian strategic control of gas resources is likely to be accentuated and extended,” Gautier said from in Menlo Park, California, in an audio file posted on Science’s Web site. (Bloomberg)

Russia VTB says to peg bonuses to share price

• VTB, Russia's second-biggest bank, will peg management bonuses to the company's share performance, Chief Financial Officer Nikolai Tsekhomsky told minority shareholders at a Friday meeting.
• "Most likely, this will concern members of the management board and a number of top managers," Tsekhomsky said. (Reuters)

Ruble Extends Biggest Monthly Rally Since 1995; Stocks Climb

• The ruble rose, extending its biggest monthly advance against the dollar since 1995, as oil headed for its best month in a decade. Stocks rallied to the highest level since September.
• Russia’s currency appreciated +1.5% to 30.8610 per dollar in Moscow trading, bringing this month’s gain to +7.5%, the steepest jump since June 1995. OAO Rosneft, the nation’s largest oil company, led the Micex Index to a +4.5% advance. The equity benchmark rose +22% in May, its best month since March 2000 and first six-month rally in seven years. (Bloomberg)

Russia's Svyazinvest plans IPO after reform - CEO

• Russian state-controlled telecoms giant Svyazinvest may hold an initial public offering on Western bourses once its reorganisation is completed, its general director said on Saturday.
• The Russian government on Friday cleared the reorganisation of Svyazinvest under the umbrella of Rostelecom which is designed to increase the holding company's efficiency and reveal the fair value of its assets. (Forbes)

Source: Russia Economic Scan

27 May 2009 | Russia Economic Scan

27-May-2009

Russia Economic Scan

In this edition: Russian economic slide worsens, Putin urges innovation to revive Russia, Russia to buy $10 bln IMF bonds, Russian banks restructured 20% of their loan portfolios, Russian stocks surge on Wednesday.

Top headlines

Russian economic slide worsening

• Russia's economy contracted sharply in April - shrinking by 10.5% from the same month a year ago - Deputy Economy Minister Andrei Klepach has said.
• The data came as officials were quoted as saying Russia would have a budget deficit equivalent to 9% of GDP in 2009, from an earlier 7.4% prediction. (BBC News)

Putin urges innovation to revive Russia

• Russia must focus on technology and innovation to modernize its economy or risk falling behind other world powers, Prime Minister Vladimir Putin said on Wednesday. "We need to move forward, to put the economy on an innovative track," Putin told an audience of business people in Moscow.
• He argued that Russia had "serious competitive advantages" in sectors like space, saying that the country could increase its share of commercial space launches from 40% to around 50%. (AFP)

Russia to Buy $10 Billion of IMF Bonds a Decade After Default

• Russia plans to buy $10 billion of International Monetary Fund bonds to help fellow member states weather the global financial crisis, a decade after the country defaulted on its own ruble debt.
• Russia joins the other so-called BRIC countries, Brazil India and China, in expressing interest in purchasing the IMF bonds as an alternative way to contribute to the Washington- based fund. At the same time, Russia plans to borrow billions of dollars from the World Bank next year to cover a budget shortfall caused by lower oil prices and collapsing tax revenue. (Bloomberg)

Russian Banks Restructured 20% of Loan Portfolios

• Russian banks restructured an estimated 20% of their loan portfolios as of April 1, the central bank’s head of banking regulation and supervision said.
• “Banks are indeed restructuring credits more actively now,” Alexei Simanovsky told reporters in St. Petersburg today at the start of a banking conference. “The question is whether they are doing this in good faith.” (Bloomberg)

Russia Stocks Rise as Oil Tops $63; Rosneft, Novatek Lead Rally

• The 30-stock Micex Index added +1.8% to 1,059.60. The RTS Index advanced +4.1% to 1,030.79. The Russian Depositary Index, measure of global depositary receipts trading in London, rose +3.6%.
• OAO Rosneft, Russia’s biggest oil producer, climbed +3.7% to 190.72 rubles on the Micex Stock Exchange. OAO Tatneft , the oil producer in Russia’s republic of Tatartstan, gained +3.1% to 129.08 rubles. OAO Gazprom, the nation’s largest natural-gas producer, gained +1.1% to 171.71 rubles. Novatek, Russia’s second-largest gas producer, climbed +5.6% to 128.32 rubles, the third-steepest gain in the Micex Index today. (Bloomberg)

Source: Russia Economic Scan

20 May 2009 | Russia Economic Scan

20-May-2009

Russia Economic Scan

In this edition: S&P says Russian economy to contract 5% and unemployment to hit 12%, Nabiullina says Russian economy may shrink up to 8%, Russia Gazprombank to raise up to $3bln, Russia's MTS sold 15 billion ruble bond, Russian stocks rose 3% on Tuesday.

Top headlines

Standard & Poor’s: Russian economy to contract 5 percent in 2009, unemployment to surpass 12 percent

• Standard & Poor's Ratings Services has predicted Russian GDP will contract 5% and unemployment will exceed 12% in 2009, Frank Gill, the agency's leading analyst for sovereign credit ratings in Russia, Kazakhstan and Ukraine, said.
• Gill said these expectations are extremely uncertain since a great deal will depend on external demand and the terms of foreign trade. He said improvements have been seen in oil prices recently, which provides support to the prospects of the Russian economy. (Kyiv Post)

Nabiullina Says Russian Economy May Shrink up to 8%

• Russian Economy Minister Elvira Nabiullina said the economy may shrink as much as 8% this year, a steeper decline than the ministry forecast in January.
• “The specific contraction numbers could be 4 percent or 6 percent or 8 percent,” Nabiullina said. “We’re doing various calculations, pessimistic and optimistic. We believe much depends on how efficient we are.” (Bloomberg)

Russia Gazprombank to raise up to $3 bln in loans

• Gazprombank, the banking arm of Russian state energy company Gazprom, said on Tuesday it plans to secure up to 100 billion roubles ($3.10 billion) in subordinated loans from shareholders and state bank VEB.
• Gazprombank has reported a net loss of 60.1 billion roubles for 2008, becoming the first major Russian bank to report a loss last year. (Reuters)

Russia's MTS sells 15 billion rouble bond

• MTS, Russia's top mobile phone operator, said on Tuesday it had placed in full a 5-year bond worth 15 billion roubles ($464.5 million).
• The bond, placed with an annual coupon rate of 16.75%, has a two-year put option. (Reuters)

OAO Dixy Group, Norilsk Nickel: Russian Stock-Market Preview

• The 30-stock Micex Index rose +2.9% to 1,041.84. The 50-stock RTS Index added +3.1% to 968.88.
• OAO Dixy Group: Russia’s third-largest listed food retailer is scheduled to publish 2008 financial results today. Dixy rose +3.8% to 123 rubles. OAO GMK Norilsk Nickel: Copper futures rose to a 1-week high as falling inventories and a weakening dollar boosted speculation that demand will increase. Norilsk advanced +6.6% to 3,349.98 rubles. (Bloomberg)

Source: Russia Economic Scan