Moscow press review for April 12, 2016
MOSCOW. April 12 (Interfax) - The following is a digest of Moscow newspapers published on April 12. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The passage of amendments to Russia's 2016 budget to factor in new economic realities might be put off until the fall, in which case they will be passed by a new State Duma along with next year's budget. This decision would make it almost inevitable that the government will opt against indexing pensions, collect Rosneft dividends from Rosneftegaz and push ahead with major privatization (Kommersant, p. 1; Vedomosti, p. 4).
TV channel Rossiya 1 plans to air a film called The Browder Effect this week that alleges opposition leader Alexei Navalny is an agent of the West who was recruited by Hermitage Capital head William Browder. Analysts believe this is a response to the release of the Panama Papers, and do not rule out a new criminal case against Navalny. Navalny intends to sue state broadcaster VGTRK and file a criminal slander complaint over the film (Vedomosti, p. 2).
OIL & GAS
Russian state oil major Rosneft is proposing to exclude information that constitutes a commercial secret from the list of information that state companies must publish in annual reports. This would level the information disclosure rules for state and private companies. One of the reasons for the proposal is that Rosneft is subject to sanctions (Vedomosti, p. 1).
Oil major Rosneft became Russia's most valuable company for the first time on Tuesday, overtaking gas giant Gazprom by market capitalization. The growth of oil prices has changed investors' attitude toward Russian assets. The MICEX stock market index rose 1.36% to 1,900 and the RTS index climbed 2.37% to 900, the highest level since last November, and the ruble strengthened against the dollar and euro (Vedomosti, p. 11).
METALS & MINING
One of Russia's biggest privatization deals of 2015, the sale of a 52% state stake in Alrosa subsidiary Diamond World at a starting price of 740 million rubles, was blocked due to the actions of an arbitration court judge who might be dismissed. The injunction against the auction has been ruled illegal, but bailiffs are refusing to stop enforcing it before the consideration of a dispute between private minority shareholders in the company, which will begin on Wednesday (Kommersant, p. 2).
Russian Copper Company, disclosing results for the first time, reported revenue up dramatically to 74.9 billion rubles and adjusted net profit up to 14.1 billion rubles in 2015, despite world metal prices being at multiyear lows. However, RMC, which exports 90% of its copper, is not planning any acquisitions for now, preferring instead to expand production at its own operations. Analysts reckon the company's projects are not big enough to shift the market balance (Kommersant, p. 9).
Interview: Ian Harebottle, CEO of Gemfields (Vedomosti, p. 8).
BANKING, FINANCE & INSURANCE
The lack of funds to pay depositors of failed Russian banks will soon be resolved. The Deposit Insurance Fund has been running a deficit for over three quarters, and the Deposit Insurance Agency has been using Central Bank credit to pay out compensation. But the DIA has now calculated a rate increase for banks' contributions to the DIF that could see their contributions increase by 9 billion-14 billion rubles this year, with Sberbank paying half (Kommersant, p. 1).
Bad loans at Trust Bank more than tripled in 2015 and amounted to more than half of its loan portfolio of 204 billion rubles (before provisions) as of the end of December, including 117.7 billion rubles overdue by over three months. But the bank, which is being bailed out, managed to show a profit, partly thanks to the write-off of credit notes (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
U.S. pharmacy giant Walgreens Boots Alliance has acquired a 15% stake in Pharmacy Chain 36.6 in exchange for its Russian distributor, Alliance Healthcare Russia. WBS also has an option to increase its stake in 36.6, which will become Russia's largest pharmaceutical retailer after its merger with A5, to a controlling interest in the next three years. Russia was one of the three fastest growing pharmaceutical markets in the world before the crisis (Vedomosti, p. 10; Kommersant, p. 10).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Tele2, Russia's fourth largest mobile service provider, has won almost a 3% share of the market in Moscow in its first three months operating in the capital. Tele2 accounted for 66.5% of all net subscriber acquisitions in Moscow in the fourth quarter of 2015. Analysts believe that, while Tele2's growth in the Moscow region is likely to slow in coming months, it will steadily increase its market share (Vedomosti, p. 11).
TRANSPORTATION & LOGISTICS
The European Bank for Reconstruction and Development has sold its 9.24% stake in TransContainer, Russia's largest railway container carrier, for 2.7 billion rubles. The buyer was pension fund NPF Blagosostoyanie, whose stake in TransContainer now exceeds 20%. Ziyavudin Magomedov's Summa Group also wanted the bank's stake and was prepared to outbid Blagosostoyanie, but could not reach an agreement with the EBRD (Kommersant, p. 7).
AUTOMOTIVE & ENGINEERING
The Russian government is not willing to give importers of small batches of luxury cars such as Bentley, Lamborghini and Ferrari an exception from requirements to install ERA-Glonass safety systems. Certification requires two crash tests, which is too expensive for the luxury segment. Importers fear this will push a number of expensive models and even car brands to leave the Russian market (Kommersant, p. 1).