Moscow press review for November 28, 2016
MOSCOW. Nov 28 (Interfax) - The following is a digest of Moscow newspapers published on November 28. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Gubernatorial elections will be held in at least 14 Russian regions in 2017, including the first elections for the leader of Sevastopol and two early elections in Kirov and Kaliningrad regions. Analysts said that veterans of defense and security agencies who have been appointed interim governors by the president will feel most confident going into elections, and the outcomes are likely to be predictable in all but a few regions (Kommersant, p. 1).
The Russian government has increased funding for national projects within the context of its project office to 178.8 billion rubles in 2017. Proposals for two more priorities - support for non-resource exports and environmental projects - have been presented to the president. Exporters might get 33.8 billion rubles, which are expected to be used primarily to expand export financing and support major equipment makers, including in the defense sector (Kommersant, p. 1).
The Yabloko Party has filed a lawsuit to overturn the results of September's State Duma election, arguing that key conditions for free elections were not observed. Candidates were not able to campaign on an equal footing and there was no effective response to voting violations, the party said. Russia's Supreme Court will consider the lawsuit on Tuesday (Vedomosti, p. 2).
It will become even harder for international companies to evade taxes. The Organization for Economic Cooperation and Development has published a Multilateral Instrument that will enable countries that join it to tighten existing bilateral agreements on avoidance of double taxation together with all that sign it. This could make life more complicated for Russian companies. Russia, which has bilateral agreements with 82 countries, intends to join the MLI, the Finance Ministry said (Vedomosti, p. 4).
OIL & GAS
The Gutseriev family has sold investors 20% of common shares in Russneft for 32.4 billion rubles in an IPO that valued the whole oil company at 161.8 billion rubles. In the first day of trading on Friday, the shares rose another 1.5%. This was Russia's first oil company IPO in a decade. A deal could have been made far earlier if not for the actions of government and security officials (Vedomosti, p. 10).
Russia and the European Commission have agreed to return to trilateral talks on the Ukrainian gas problem for the first time in a year. Negotiations might be held in mid-December. The EC wants to persuade Ukraine to buy Russian gas this winter. The positions of Gazprom and Naftogaz Ukraine on the terms of such a deal have been irreconcilable until now, but hearings in Stockholm on the companies' lawsuits have ended, opening the door to possible mutual concessions (Kommersant, p. 8).
BANKING, FINANCE & INSURANCE
Russians' investments in savings certificates, which have become a popular instrument in recent years, dropped for the first time in July-October, decreasing by about 10% to 537.9 billion rubles as of November 1. Ahead of the adoption of Civil Code changes that will prohibit the most popular bearer certificates, the Central Bank is not recommending that banks register new issues, sources said (Kommersant, p. 1).
Life insurance companies in Russia, like nongovernmental pension funds, will be able to sell 'individual pension capital,' a voluntary retirement savings system proposed by the Finance Ministry and Central Bank to replace the funded portion of the pension system. In return, pension funds want to be able to sell life insurance policies (Vedomosti, p. 11).
RETAIL & CONSUMER MARKET
Interview: Stefano Sassi, CEO of Valentino S.p.A. (Vedomosti, p. 8).
REAL ESTATE & CONSTRUCTION
The growth of overdue debt at Russian construction companies that began amid the economic crisis has accelerated due to lower margins and late payments for contracts. The share of overdue debt jumped 4.7 percentage points to 24.7% of all loans to builders in the first ten months of 2016. Access to new loans that could improve the situation for developers is limited and lending in the sector rose by just 2% after inflation in the ten months (Kommersant, p. 1).
Police detained the owner of property developer NBM-Stroyservis, Mikhail Babel, last week on charges of fraud. Babel is suspected of double selling apartments in residential complexes in Moscow and the surrounding region, and could face up to ten years in prison. One of the developments involved is Terletsky Park in Moscow and it is not clear who will now complete the project (Vedomosti, p. 10).
TRANSPORTATION & LOGISTICS
The Prosecutor General's office has accused the CEO of Russian Post, Dmitry Strashnov of illegally enriching himself by awarding himself a bonus of 95 million rubles for 2014. The state company reported a net profit of 1.2 billion rubles for 2014, but an audit showed that this was thanks to a government subsidy of 5.4 billion rubles. The office has sent materials for a criminal investigation to the Investigative Committee (Vedomosti, p. 1).
AGRICULTURE, FISHING & FORESTRY
Russia's animal health watchdog might impose a quarantine in Krasnodar Territory due to outbreaks of African swine fever. Ten outbreaks in various areas of the southern region were reported in November and the situation is not under control, the watchdog said. A quarantine could halt grain exports through the region's ports on the Black Sea (Vedomosti, p. 11).