MOSCOW. Dec 3 (Interfax) - The following is a digest of Moscow newspapers published on December 3. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Purchasing Managers' Index for Russia's manufacturing sector fell to a 10-year low of 45.6 points in November from 47.2 points in October 2019. The drop was attributed to weakening demand, including from foreign companies, which resulted in the steepest decline in new orders since March 2009. November was the seventh consecutive month of declining business activity in manufacturing (Vedomosti, p. 1).
Russia's economy ministry has proposed to give importers and companies whose goods cross Russia in transit access to a unified digital platform for exchanging data. The 'single window' system will make it possible to provide data and documents in a standard form that will then be used multiple times by various authorities. There are plans to launch a single window system for exporters in November 2020 (Vedomosti, p. 4).
OIL & GAS
The owner of Safmar Group, Mikhail Gutseriev has inserted himself into the usual pre-New Year gas negotiations between Russia and Belarus, requesting that the intergovernmental agreement with Belarus include a separate line item for gas supplies to Slavkali, his potash project in the country. This would enable Safmar to save about $20 million per year. Market insiders doubt the government will agree to such preferences (Kommersant, p. 1).
The presidents of Russia and China on Monday officially launched Power of Siberia, Gazprom's first export pipeline to a new market. The start of Russian pipeline gas exports to China will bring strategic energy cooperation between the two countries to a new level, Russia's president said. The new 2,157-km pipeline will reduce Gazprom's dependence on Europe, and in time the Chinese market could become just as important (Vedomosti, p. 12).
Minority shareholders of Rosseti have complained to Russia's Central Bank about violations of corporate procedures at the state power grid group, sources said. They suspect Rosseti of intentionally depressing the market cap of subsidiaries and trying to delist them amid plans for a major consolidation. As an extreme measure, they propose to exclude Rosseti shares from the Moscow Exchange's top listing (Kommersant, p. 7).
METALS & MINING
Trade barriers and excess global capacity led to a 13% drop in Russian steel exports in the first nine months of 2019, Russian Steel reported. The share of semi-finished products, which are subject to the lowest number of trade restrictions, grew to a 20-year high of 56% of total exports. In this environment, the leading steelmakers are stressing the appeal of Russia's domestic market (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
Russia's financial system is in good shape to face the anticipated slowdown of global growth, the Central Bank's latest financial stability report indicates. Risks for the financial system have been declining, and the potential impact of external shocks has decreased even faster than internal risks. Also, the Finance Ministry has proposed to agree with the Central Bank on how to neutralize a major medium-term threat starting in 2020 - future spending from the National Welfare Fund (Kommersant, p. 1).
The Central Bank of Russia might restrict mortgage lending to debt-ridden individuals by applying the debt burden ratio to such loans, as the share of mortgage borrowers with other loans has grown to 46%. In terms of impact on capital adequacy, the ratio is now only applied to consumer loans. Banks oppose the proposal, warning that it will reduce the amount of mortgage lending and push up the cost of loans (Kommersant, p. 8; Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
Russians plan to give the most expensive New Year gifts to themselves this year, and are willing to spend an average of 10,000 rubles on this, two times more than last year, Nielsen found. The average budget for gifts for spouses is unchanged at 5,900 rubles. Consumers are now in a better position to afford extra spending, as official statistics show that real incomes rose by 3% in the third quarter, the first such increase in five years (Kommersant, p. 1).
TsUM, the Russian department store, wants to become the country's leading retailer of luxury brands for children. It plans to devote the whole fifth floor of its Moscow store, nearly 7,000 sqm, to children. The floor will have 4,800 sqm of retail space with collections from brands such as Dolce & Gabbana and Gucci, and an entertainment center with cafe. Demand for luxury children's goods is growing, but supply is currently limited, analysts said (Vedomosti, p. 11).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russian state agencies will be barred from installing and modernizing information systems based on the proprietary code of foreign companies as of January 1, 2024, with certain exceptions, the government decided. This will essentially mean a ban on using foreign software, but it will be difficult to supply the government with adequate Russian alternatives in four years, experts warned (Kommersant, p. 10).
TRANSPORTATION & LOGISTICS
The consortium of Baring Vostok and Vostok New Ventures has acquired a 9.1% stake in Monopoliya, one of Russia's largest trucking and logistics companies, for 600 million rubles. Baring Vostok believes Monopoliya has the potential to increase its value tenfold to $1 billion, primarily thanks to the development of its own electronic platform for managing full truck loads. The proceeds from the share sale will go into the platform (Vedomosti, p. 11).
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