Moscow press review for October 31, 2016
MOSCOW. Oct 31 (Interfax) - The following is a digest of Moscow newspapers published on October 31. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Former Rosatom CEO Sergei Kiriyenko, who was recently appointed first deputy chief of the Kremlin administration, will soon replace Boris Gryzlov as chairman of the state nuclear corporation's supervisory board. The appointment will give Kiriyenko more political weight as the new head of domestic policy at the Kremlin. This could be a new stage in the development of Russian state capitalism, one expert believes (Vedomosti, p. 1).
Security Council experts have discussed preparations for the 100-year anniversary of the Russian Revolution in 2017 and the need to combat attempts to intentionally distort this and other key periods in Russian history. Proposals were made to set up a state center that would take into account the experience of a defunct commission for preventing attempts to falsify history. The Russian Historical Society sees no need for such a center (Kommersant, p. 1).
International law firm White & Case, which is defending Russia from the claims of the former shareholders of Yukos oil company, will represent the country in arbitration court in The Hague in a lawsuit filed by the founder of Mezhprombank and former senator Sergei Pugachev. The tycoon, who is wanted in Russia on embezzlement charges, is suing the country for $12 billion (Vedomosti, p. 2).
Russia's Central Bank, as expected, left its key interest rate unchanged at 10% on Friday and reaffirmed that it would remain unchanged until the end of 2016, with the possibility of a cut in the first or second quarter of 2017. The Bank said there are still risks that the inflation target of 4% by the end of 2017 will not be achieved, partly due to still-high inflation expectations and possible wage growth not backed by productivity gains (Vedomosti, p. 4).
OIL & GAS
The Russian government, in a hurry to get the more than 700 billion rubles in anticipated proceeds from the sale of a 19.5% stake in Rosneft so it can meet the budget deficit target, is prepared to allow the state oil major to buy the shares itself. But this would only be a temporary arrangement and Rosneft would have to resell the shares to investors in the first quarter of 2017 (Vedomosti, p. 5).
Rosneft has prepared a buyout offer to the minority shareholders of oil company Bashneft, in which it bought a controlling stake in mid-October. Rosneft is prepared to buy out 37.5% of Bashneft common shares. The buyout price is not indicated, but the state oil major said its maximum obligations in the offer would not exceed 206 billion rubles (Vedomosti, p. 10).
BANKING, FINANCE & INSURANCE
Insurers have found a way to avoid complaints from buyers of mandatory auto insurance about the operation of their websites after January 1, 2017, when electronic sales of such policies become mandatory. The system of the Russian Auto Insurers Union's unified agent will support uninterrupted sales if insurers' sites crash. This will enable insurers to temporarily avoid selling policies in unprofitable regions, but not avoid the regulator's penalties for nonworking sites (Kommersant, p. 1).
Russia's Central Bank and Finance Ministry have made a concession to the market and cancelled a rule that would have allowed creditors to request credit histories only with an individual's personal insurance account number. The regulator has been forced to abandon the idea of consolidating complete ID information about individuals in credit histories by the intransigence of the state Pension Fund, which does not want to share information with banks (Kommersant, p. 1).
Russian banks' credit card portfolio has almost stopped shrinking, Tinkoff Bank reported. Banks' combined loan portfolio on cards slipped just 0.1% from the previous quarter to 1.01 trillion rubles in the third quarter of 2016. The portfolio of unsecured retail credit grew by 2.4%. Market players expect the credit card portfolio to grow in the fourth quarter (Vedomosti, p. 11).
RETAIL & CONSUMER MARKET
Russia's largest food retailers have started notifying suppliers that provisions of the Fair Practices Code no longer apply to their relations. Retailers say this is a temporary measure due to the new law on retail trade, and claim they still support the principles of self-regulation in the industry. Meanwhile, suppliers have faced an increase in penalties, the size of which is not specified in the law, but covered in the code (Kommersant, p. 1).
REAL ESTATE & CONSTRUCTION
Sberbank has sold the debt of Don-Stroy and Nordstar Development founder Maxim Blazhko that is secured by the Schuka shopping center in northwest Moscow to Riverstretch Trading & Investments, a company that might be controlled by state oil major Rosneft. The total debts of Blazhko's companies may have topped $600 million, sources said (Vedomosti, p. 11).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Rusnano is selling its 20.42% stake in Micron to Sistema for 8.1 billion rubles. The deal, which will be closed by the end of 2017, will increase Sistema's stake in the Russian microchip maker to 90.6%. The investment in Micron did not bring a very high return, but it was more profitable than Rusnano's other projects in microelectronics, analysts said. Sistema is expected to seek a new state partner for the project (Kommersant, p. 7).
TRANSPORTATION & LOGISTICS
Domodedovo Airport disclosed during a road show for a new Eurobond offering that it will extend a dollar loan equivalent to 6 billion rubles to its shareholder at 0.5%-2.1% interest by the end of the year. The 8.5 billion rubles that the Moscow airport lent in 2015 to its parent company, whose ultimate beneficiary is Dmitry Kamenschik, have already essentially been written off (Vedomosti, p. 10).