Moscow press review for September 6, 2016
MOSCOW. Sept 6 (Interfax) - The following is a digest of Moscow newspapers published on September 6. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russian investigators are accusing the senior management of T Plus, the power division of billionaire Viktor Vekselberg's Renova Group, of bribing officials in Komi. T Plus CEO Boris Vainzikher and chairman Yevgeny Olkhovik have already been detained. The company's former chief executive, Mikhail Slobodin, who is currently abroad, is also under investigation in the case and has stepped down from his current position as CEO of Vimpelcom (Vedomosti, p. 1; Kommersant, p. 1).
Levada Center, Russia's only independent, nongovernmental polling organization, has been designated a 'foreign agent' by the Justice Ministry, which said it found that the center received financing from abroad and engaged in political activity. This could lead to the closure of one of Russia's three main sociological research services, since the center will not be able to do its job, Levada director Lev Gudkov said (Kommersant, p. 1; Vedomosti, p. 2).
Consumer price inflation in Russia was zero in August for the first time in almost five years thanks to a seasonal drop in food prices, Rosstat reported. Annual inflation slowed to an almost 2.5-year low of 6.9% in August from 7.2% in July, and inflation in January-August was 3.9%. Inflation expectations also decreased significantly in August, bolstering arguments for the Central Bank to cut its key interest rate (Vedomosti, p. 4).
Russia's Finance Ministry has drafted an order to introduce an indefinite rule requiring state companies to pay out dividends amounting to at least 50% of IFRS net profit. The ministry intends to close all loopholes, including not making allowances for companies' investment programs. This would generate an extra 200 billion rubles in revenue in 2017, 225 billion rubles in 2018 and 250 billion rubles in 2019, it reckons (Vedomosti, p. 10).
OIL & GAS
Six months after negotiations failed, Russia and Saudi Arabia on Monday relaunched talks on an oil production freeze to stabilize oil prices. The countries issued a joint statement on the need for close cooperation that nearly caused a sensation but is open to interpretation. Previous experience casts doubt on the reality of production freeze or other coordinated actions, but there is a chance, since both countries face a budget crunch (Kommersant, p. 7).
Independent Russian gas producer Novatek, whose core assets are located on the Yamal Peninsula, has taken an interest in a new region, Yakutia. Rosneft already has fields there and their main problem is inability to sell their gas. Novatek will also face this problem, so in future it might join the state oil major in the fight with Gazprom for access to the Power of Siberia pipeline to China (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
Russia's Housing and Utilities Reform Fund lost 1.78 billion rubles in the failed Vneshprombank, the Audit Chamber reported. The fund has little chance of recovering the money, as the bank has 36.5 billion rubles in assets and 252.5 billion rubles in liabilities. The fund asked the Prosecutor General's office to investigate officials at the Central Bank, the regulator of the banking sector (Vedomosti, p. 11).
RETAIL & CONSUMER MARKET
Summer box office receipts in Russia and the CIS, not including Ukraine, grew 10% year-on-year to a new record high of 12.9 billion rubles this year, including 12.0 billion rubles in Russia alone. A record 54.5 million people went to the movies in June-August, including 50.1 million in Russia alone. Many viewers did not go away for the holidays and there was an interesting selection of films showing, analysts said (Vedomosti, p. 11; Kommersant, p. 7).
Interview: Franck Riboud, Chairman of Danone (Vedomosti, p. 8).
REAL ESTATE & CONSTRUCTION
Moscow builders postponed the completion of 60% of announced residential real estate projects in the first half of 2016. The most postponed properties are in the segment of apartments built on non-residential zoned land. Developers are not only facing traditional problems with utility services, but also expensive loans, lack of financing and contractors that are constantly going bankrupt (Kommersant, p. 1).
Russia has approved a roadmap for energy efficiency that aims to make 30% of new residential buildings compliant with the highest energy efficiency rating by 2025 and slash energy costs in the housing and utilities sector by 25%. The program is doable and will not affect the price of new housing, as such measures pay for themselves in five-seven years, analysts said. But bringing old housing up to the new standards might be too costly (Kommersant, p. 2).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Taxi hailing service Gett plans to invest about $100 million in Russia over the next year to expand to new cities and promote the service where it is already available. Gett is fighting for market share, as rival Yandex.Taxi is already moving into cities with populations upwards of 500,000 people. Russia's taxi service market is estimated at $3 billion-$4 billion and is expected to grow by 6%-10% annually for another two to three years (Vedomosti, p. 10).