Moscow press review for August 14, 2015
MOSCOW. Aug 14 (Interfax) - The following is a digest of Moscow newspapers published on August 14. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The drop in oil prices and weakening of the ruble increase the risk that the recession in Russia will deepen and the recovery will be postponed until next year at the earliest, Moody's believes, noting that Rosstat data released this week show that the drop in GDP more than doubled to 4.6% in the second quarter from 2.2% in the first. Also, the extension of sanctions will keep the country in financial isolation (Vedomosti, p. 1).
Rosstat and the Central Bank said financial accounts data and balances will be published in the national accounts system as of January 2016. The first data already show the high level of households' participation in net lending to the rest of the economy, accumulation of financial assets in industry and the high importance of shadow lending for the Russian economy. It is now possible to estimate forex assets held by Russian households - about $25 billion - and the real scale of financial operations in the shadow economy (Kommersant, p. 1).
The United States plans to complain to the UN Security Council about Russia violating sanctions against Iran by allegedly allowing a top Iranian general to visit Moscow recently. Moscow sees this "as another unfriendly move against Russia and its Iranian partners," a source said. Analysts said the U.S. has no real leverage over Moscow on this issue, but raising it in the Security Council could further hurt Russia's image (Kommersant, p. 1).
OIL & GAS
It is still unclear who was to blame for the oil product leak that led to a fire on the Moscow River on Wednesday. The city believes the leak came from a Transneft pipeline that runs from the Moscow Oil Refinery, but the pipeline monopoly claims the fuel could have gotten into the river from a rainwater sewer. Pumping of fuel through the pipeline has been suspended, but if it resumes within a few days the Moscow fuel market will not be affected (Kommersant, p. 9; Vedomosti, p. 11).
METALS & MINING
Kyrgyzstan and Kazakhstan's Visor have reached an amicable settlement in the dispute over the Jerooy gold deposit with the help of Musa Bazhaev's Russian Platinum, the new owner of the license to the deposit. Visor has dropped its $548 million lawsuit against Kyrgyzstan over the loss of the license. Although Visor had no formal claims against the Russian Platinum group, the lawsuit was also a risk for the Russian investors, so Visor may have received some compensation, analysts reckon (Kommersant, p. 7).
BANKING, FINANCE & INSURANCE
VTB24, the retail arm of Russian state bank VTB, plans to securitize at least 40 billion rubles worth of mortgage loans in the third quarter. But since there are no investors on the market, VTB24 will buy up the mortgage bonds itself in order to raise money from the Central Bank using the bonds as security. VTB24 has so far securitized about 126 billion rubles of its mortgage portfolio, which totals 700 billion rubles (Vedomosti, p. 10).
MEDIA
The Russian advertising market continued to shrink in the second quarter of 2015, falling by about 15.5% to 74 billion rubles. The only market segment that continued to grow was the Internet, where advertising revenue rose 11% to 23.7 billion rubles. But Internet advertising grew only on the back of contextual ads, which rose 15% to 19.3 billion rubles and now account for over a quarter of the Russian advertising market (Vedomosti, p. 1; Kommersant, p. 7).
RETAIL & CONSUMER MARKET
Samsung, which saw its share of the Russian smartphone market by unit shrink from 25.6% to 17.6% in June to mid-July after retail chains Euroset and Svyaznoy stopped selling the Korean company's mobile devices, has started offering rebates to small regional dealers, averaging 6% of the price of sold devices. Such companies account for up to 50% of Samsung smartphone sales in Russia's regions (Vedomosti, p. 10).
Russian online retail sales grew 28% to 305 billion rubles in the first half of 2015, not including digital goods, travel bookings or purchases abroad, Data Insight reported. Unlike in past years, the growth was driven primarily by inflation rather than consumer activity. The depreciation of the ruble and price hikes increased the average purchase size by 19%, while the number of purchases rose by 8% (Vedomosti, p. 11).
REAL ESTATE & CONSTRUCTION
Financial Corporation Uralsib principal owner Nikolai Tsvetkov is selling almost 4,000 hectares of land in Moscow Region, the main asset of his real estate development company Znak, to the Ananyev brothers' Promsvyazcapital Group for 3.7 billion rubles, nearly 50% below the market price. Tsvetkov is forced to sell these assets quickly and at a discount because he needs to raise money by September to recapitalize Uralsib Bank (Kommersant, p. 1).
Russian government agencies spent only 3.1% of the 95.35 billion rubles allocated by the budget this year for building infrastructure for the 2018 World Cup championships in the first quarter, the Audit Chamber reported. Officials claim financing was postponed as work on some projects was rescheduled with the government's approval (Vedomosti, p. 4).
TRANSPORTATION & LOGISTICS
Latvian officials are worried that Russia reportedly intends to suspend transshipments of coal and mineral fertilizer through the Riga port, citing railway repairs. They believe this might to a response to the arrest of Latvian Railway CEO Ugis Magonis, who is close to Russian Railways. The latter says freight is being shipped to Latvia as usual and major repairs are not planned, but rail freight operators are already bracing for problems (Kommersant, p. 1).
