Moscow press review for April 11, 2016
MOSCOW. April 11 (Interfax) - The following is a digest of Moscow newspapers published on April 11. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The head of Russia's Federal Property Agency, Olga Dergunova might step down in the next few days, primarily due to differences with Economic Development Minister Alexei Ulyukayev, government sources said. She might return to state bank VTB in the position of deputy CEO. Potential successors for Dergunova at the Property Agency include Norilsk Nickel director of federal and regional programs Dmitry Pristanskov (Vedomosti, p. 1).
Ukrainian Prime Minister Arseniy Yatsenyuk announced his resignation on Sunday. He called for the formation of a new coalition and named Verkhovna Rada Speaker Volodymyr Groysman as his likely successor. Yatsenyuk's People's Front party has a good chance of getting a number of key posts in the new government. The main winner from the upcoming reshuffle appears to be President Petro Poroshenko (Kommersant, p. 1; Vedomosti, p. 3).
Russia's Economic Development Ministry has drafted legislation to cut red tape in payment for contracts by government customers. Failure to meet payment obligations on government contracts is widespread and debt on them stood at 25 billion rubles at the end of 2015, according to prosecutors. Now officials will have to pay small businesses within ten days and large contractors within a month, or face fines or disqualification (Kommersant, p. 1).
Chechen leader Ramzan Kadyrov cannot get the federal government's support on several important projects, including the transfer of oil company Chechenneftekhimprom to the region, resettlement of 25,000 people from areas prone to landslides, and the restoration of Grozny airport. Kadyrov has again complained about this to President Vladimir Putin, but these issues are unlikely to be resolved quickly (Kommersant, p. 1).
At the first meeting of a BRICS working group on the environment, Russia's Natural Resources and Environment Ministry proposed creating a Green Technologies Platform to share know-how. Analysts reckon Russia is foremost interested in green financing and credit programs operating in China and Brazil, and experience in raising international funds to finance joint environmental projects with BRICS countries (Kommersant, p. 2).
OIL & GAS
The Energy Ministry expects Russia to increase oil production by 1% to 540 million tonnes and oil exports by 3.5% to 228 million tonnes in 2016. But analysts warn that this will be a short-lived effect of active investment in drilling in 2015 that will soon fade. Companies are investing little in exploration, without which production cannot grow in future (Kommersant, p. 9).
UTILITIES
Rosneft president Igor Sechin and two other executives from the state oil major have been nominated to the board of directors of one of Russia's biggest energy holding companies, RusHydro. Sechin might be elected chairman of the RusHydro board instead of Deputy Prime Minister Yury Trutnev, though the latter has also been nominated (Vedomosti, p. 10).
Onexim Group's energy company Quadra is close to an agreement with Sberbank and Gazprombank on new loans to finish its investment projects. The company could get 7 billion rubles on the condition that Onexim co-invests at least 3 billion rubles. But the banks will not sign off until Quadra gets guarantees for the deferral of over 6 billion rubles in fines on the energy market, and customers are not inclined to agree to this (Kommersant, p. 7).
BANKING, FINANCE & INSURANCE
Russia's Central Bank is concerned bout the growth of unsecured retail credit. The regulator is assessing the situation on the market and if the growth of consumer credit turns out to be a widespread trend it might take steps to curb it. Banks concede that there has been a recovery in demand for retail credit, but promise to remain circumspect and conservative in their lending practices (Kommersant, p. 1).
Sberbank, Russia's leading lender, is creating a second venture capital fund with upwards of $100 million in capital. It will invest in Russian and foreign financial technology projects, artificial intelligence and big data analysis. The new fund, like the first, is expected to be managed by MoneyTime Ventures (Vedomosti, p. 11).
Interview: Alexei Rybnikov, President of the St. Petersburg International Mercantile Exchange (Vedomosti, p. 8).
RETAIL & CONSUMER MARKET
One of the creditors of Russian footwear retailer Centrobuv, Gazprombank is asking the police to investigate the legality of the financial activities of the company's owners and management. The bank suspects them of conducting fraudulent deals and funnelling out money provided under a credit line. The retail chain claims it is cooperating with the bank and conducting a joint audit (Kommersant, p. 7).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
The right to vote a 15% stake in Rostelecom might be handed from the Russian national telecom provider's management to its board of directors. This would be the lesser evil from the point of view of minority shareholders. It would be best to cancel the quasi-treasury shares, but management believes in their value for the company (Vedomosti, p. 11).
AGRICULTURE, FISHING & FORESTRY
Russian legislators are proposing to impose a progressive tax on agricultural land that is not used for its intended purpose in order to force owners to cultivate the land. The Agriculture Ministry does not oppose the idea, but believes it needs to be fine-tuned. The tax could go as high as 7.5% compared to the current 0.01-0.3%. The ministry is also drafting a bill on seizure of uncultivated land (Vedomosti, p. 10).