Moscow press review for May 24, 2016
MOSCOW. May 24 (Interfax) - The following is a digest of Moscow newspapers published on May 24. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russia has announced an offering of 10-year Eurobonds totaling $3 billion, its first in three years. The only organizer of the placement is VTB Capital. The target yield is 4.65%-4.9%. Officials said the offering is intended to feel out the market. The deal was expected to be closed on Monday, but the closure of the order book was put off until May 24 in anticipation of Asian investors (Vedomosti, p. 1; Kommersant, p. 8).
The working group for priority structural reform and economic growth of the Russian president's economic council will present its reform proposals in 2017, group chairman Alexei Kudrin said. Decisions will not be made at the May 25 meeting of the council, while the working group's proposals will be synchronized with the Strategy-2030 being drafted by the government, which will take a year (Kommersant, p. 1).
The Russian Carbon Fund will on Tuesday announce the launch of a voluntary emissions reduction register. Amid the slow creation of a system of state carbon regulation that faces resistance from some industrial companies, the fund hopes to set up a pilot system that will enable Russian companies to sell and buy emission reductions, including abroad (Kommersant, p. 2).
Russians have seen their wages in dollar terms tumble 40% in two years due to the depreciation of the ruble and the economic crisis, and in 2015 the average monthly wage in Russia was the equivalent of the average wage in Belarus in 2013, a new report shows. Wages in China and Brazil are now higher than in Russia in dollar terms, but by purchasing power parity wages in Russia are still higher (Vedomosti, p. 4).
METALS & MINING
Russian gold miner Petropavlovsk sees "great potential" in a possible merger with Zoloto Kamchatki, the gold miner controlled by billionaire Viktor Vekselberg, whose Renova Group owns 22.28% of Petropavlovsk. The latter intends to study this possibility after taking over Amurzoloto. The three companies together would have reserves of more than 12.8 million ounces and combined production of 600,000-650,000 ounces per year (Kommersant, p. 9; Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
A Moscow court has frozen the Russian assets of former Russian Credit Bank owner Anatoly Motylev, who is living abroad. The assets were frozen in a criminal fraud investigation. The hole in the capital of Motylev's failed banks exceeds 75 billion rubles (Kommersant, p. 1).
The clients of International Financial Club, the principal owner of which is billionaire Mikhail Prokhorov, withdrew 10 billion rubles from the bank in April, with retail depositors pulling out 9.6 billion rubles or 19.6% of term deposits. The outflow of deposits coincided with law enforcement agencies' searches of the offices of companies in Prokhorov's Onexim Group (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
The share of imported cheese on the Russian market has resumed growing for the first time since the food embargo was imposed, as imports jumped 31% in the first quarter of 2016. The growth was largely due to Belarus, and imports from Serbia and Armenia, though small, are growing steadily. Meanwhile, production of Russian cheese is slowing due to shortages of inputs and low margins (Kommersant, p. 1).
TOURISM
Intourist helped finance the renovation of hotels in Crimea by buying up rooms for several seasons in advance at discounts of up to 45%. The amount involved is in the tens of millions of rubles. This might have violated sanctions that Thomas Cook, the owner of 75% of Intourist, is obligated to observe (Vedomosti, p. 10).
REAL ESTATE & CONSTRUCTION
The decline in buying activity on Russia's residential real estate market amid the drop in household incomes is negatively impacting the whole construction market. The key results of builders will drop 20-25% in 2016, industry rating agency RASK forecasts. Companies are investing less in fixed assets, having trouble repaying loans and going bankrupt more frequently (Kommersant, p. 1).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Sberbank, Russia's biggest lender, is opposed to restricting purchases of foreign software and forcing state companies to buy products from the register of domestic software, arguing this would undermine competition. Legislation needs to be rewritten in order to develop import substitution, the bank said in a letter to the Communications Ministry (Vedomosti, p. 11).
AUTOMOTIVE & ENGINEERING
Avtovaz dealers can only order 50% to 67% fewer Lada Largus cars than they would like, because the Russian automaker cannot produce enough of them as demand turned out to be stronger than expected. There is a particular shortage of Largus vans. The Lada Largus is the fourth most popular Lada model and the tenth most popular car on the Russian market (Vedomosti, p. 11).
