Moscow press review for September 26, 2016
MOSCOW. Sept 26 (Interfax) - The following is a digest of Moscow newspapers published on September 26. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
President Vladimir Putin said at a meeting last week that the tax regime in Russia will not change in the period to 2019, although the Finance Ministry had been proposing to raise taxes on businesses and individuals, federal officials said. The only exception will be the oil and gas sector. The federal government will borrow more and reduce spending in order to meet the budget deficit target (Vedomosti, p. 1).
The United States and its allies harshly criticized Russia at a UN Security Council meeting on the Syrian crisis on Sunday, blaming it for the resumption of full-scale fighting in Aleppo. In addition, 30 Syrian opposition groups issued a statement calling Moscow a sponsor of the Assad regime and rejected its further mediation for a settlement. Russia's ambassador to the UN said bringing peace to Syria has become virtually impossible (Kommersant, p. 1).
Despite its resounding victory in the State Duma election on September 18, United Russia has decided to leave half of the committees in the Duma to opposition parties in order to maintain the inter-party consensus that took shape after Crimea became part of Russia. The number of committees in the Duma will be reduced, and their chairmen will be vetted for conflict of interests (Vedomosti, p. 2).
Annual inflation in Russia slowed to 6.9% in August from 7.2% in July, which fits into the trajectory of the Central Bank forecast that it will slow to 5.5%-6% by the end of 2016, the Bank said. But the regulator still sees inflation risks in the volatility of economic agents' expectations, due to their dependence on the market situation and rising prices for nonfood goods (Kommersant, p. 2).
Russia's Finance Ministry and Central Bank presented a new reform for the pension system on Friday. The whole 22% pension contribution paid by employers would go into the pay-as-you-go system, and an additional contribution of up to 6% would be introduced for the funded portion, with state guarantees and tax deductions for these savings. Analysts said such a model would benefit only people with above average incomes (Kommersant, p. 2; Vedomosti, p. 4).
Interview: Dario Nardella, Mayor of Florence, Italy (Vedomosti, p. 8).
OIL & GAS
State oil major Rosneft, which accounts for almost 40% of the oil carried by the trunk pipelines of Transneft, has asked the government change how the investment component in the pipeline monopoly's tariffs is charged. Rosneft is also unhappy that Transneft's dividend expenditures can be factored into its tariffs. Transneft said that if the government renounces the dividend component in the tariff, its revenue will drop (Kommersant, p. 9).
UTILITIES
Materials in the bribery case against Renova Group managing director Yevgeny Olkhovik and the CEO of power company T Plus, Boris Vainzikher have been handed over to the Russian Investigative Committee's central office because there might soon be new suspects in the case, sources said. Investigators might even have questions for Renova owner Viktor Vekselberg (Kommersant, p. 1).
BANKING, FINANCE & INSURANCE
Russia's Central Bank has completed monitoring microfinance organizations' compliance with requirements to join self-regulating organizations, and as a result decided to exclude 620 violators from the register. Another 326 violators have been given up to 90 days to address identified violations. If they do not do so, almost a third of micro lenders could leave the market (Kommersant, p. 1).
State-controlled companies earn a lower return for investors than other public companies, a study of 6,600 companies in 61 countries shows. This trend can help fund managers and other investors outperform the indexes just by avoiding or limiting investment in state company shares. State-controlled companies account for almost 50% of market cap in Russia, compared to 4% in developed countries and 35% in emerging markets overall (Vedomosti, p. 10).
The former co-owner of Trust Bank, Ilya Yurov claimed in a London court that Otkritie Holding promised him $50 million for the troubled bank. Otkritie shareholder Vadim Belyaev denies this, saying they only discussed a bailout of the bank. Yurov's testimony in the lawsuit that Trust Bank filed against its former owners also shows that he was prepared to sell the bank to Rosneft for $1. The court has frozen $830 million in assets belonging to Trust's former owners and their spouses (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
The Russian market can support the opening of only another 353 large-format stores in regions outside of Moscow and St. Petersburg, meaning the overall number of hypermarkets in the country can only grow by another 50%, Renaissance Capital said in a study, citing the country's low population density. Any additional hypermarkets would risk lower sales per square meter (Vedomosti, p. 11).
Interview: Jean-Paul Agon, Chairman and CEO of L'Oreal (Kommersant, p. 13).
TRANSPORTATION & LOGISTICS
Russian Railways (RZD) plans to close a loophole next year that currently allows oil companies to vary labelling of oil products so as to pay a lower shipping rate. With a number of changes to its tariff rules, RZD hopes to earn an extra 15.3 billion rubles in 2017. This measure will reduce oil companies' margin on exports of oil products, analysts expect (Kommersant, p. 11).
AUTOMOTIVE & ENGINEERING
Interview: Boris Obnosov, CEO of Tactical Missiles Corporation (Kommersant, p. 1).
