Moscow press review for June 24, 2015
MOSCOW. June 24 (Interfax) - The following is a digest of Moscow newspapers published on June 24. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
President Vladimir Putin, speaking at a meeting of the Public Chamber on Tuesday, said that the law on nonprofit organizations needs to be amended because some of its terms are "not uniformly understood" and sometimes hurt "absolutely loyal, pro-Russian" organizations. This refers primarily to the term "foreign agent," and probably to Vimpelcom founder Dmitry Zimin's Dynasty Foundation (Kommersant, p. 1).
Armenia is on the verge of a serious political crisis after police cracked own on demonstrators in Yerevan protesting a steep rate hike for electricity late Monday. Opposition rallies continued on Tuesday and protests began in other cities as well. The protest movement, which started under economic slogans, could become political and have very unpleasant consequences for the authorities, analysts said (Kommersant, p. 1).
The State Duma constitutional law committee is expected to approve a bill on Wednesday that would make it possible to halt the operations of companies for 90 days if they fail to comply with court rulings. The bill is intended to improve enforcement proceedings for non-property claims, when the actions of debtors in contempt of rulings could jeopardize people's health and safety (Vedomosti, p. 2).
Kazakhstan could become the 162nd member of the World Trade Organization by the end of this year, the country's authorities said after the conclusion of negotiations within a WTO working group. Following the talks, Kazakhstan's import duties on over a quarter of items are lower than in the Eurasian Economic Union, of which it is a member. Agreeing these exceptions with Russia and other EEU members could take years and delay Kazakhstan's accession to the WTO, analysts said (Kommersant, p. 2).
The situation in Russian industry continues to deteriorate, data from the Higher School of Economics. Average utilization of capacity fell by another 1%. But for the first time in five months company managers reported a possible improvement in prospects for production growth. Given a favorable scenario, industrial production could decline by less than 2%, analysts believe (Vedomosti, p. 5).
OIL & GAS
France's Total is returning a 25% stake in Shtokman Development AG, which was formed in 2008 to develop the first phase of the huge Shtokman gas field in the Barents Sea, to Russia's Gazprom. When the project, stalled by the U.S. shale revolution, low oil prices and sanctions, is resumed Total expects to be the first to be invited back into it (Vedomosti, p. 1).
Russia increased oil exports to China by 33% year-on-year to 3.921 million tonnes in May, even as China reduced oil imports by 10.9%. For the first time since 2005, Russia has become the largest supplier of oil to China, overtaking Saudi Arabia and Angola. But Russia's leading position will not last long, analysts believe (Vedomosti, p. 12).
Interview: Albert Shigabutdinov, CEO of TAIF Group (Vedomosti, p. 8).
BANKING, FINANCE & INSURANCE
A state reinsurance company will be created with funding from Russia's Central Bank and it will have charter capital of 71 billion rubles, the regulator told insurers at a closed-door meeting on Tuesday, sources said. This is how the Central Bank intends to tackle the problem of reinsuring risks of clients hit by sanctions while simultaneously tightening control over removal of funds through reinsurance (Kommersant, p. 2).
Return on capital at Russian banks specializing in retail lending was negative 6.8% in the first quarter of 2015, the Central Bank reported. The retail loan portfolio shrank by 5.2%, while the share of consumer loans overdue by over 90 days rose to 14.2% as of April 1. Retail lenders will not emerge from losses before the end of the year, the Central Bank expects (Vedomosti, p. 10).
REAL ESTATE & CONSTRUCTION
A fast-track approval process might be introduced for the construction of the bridge across Kerch Strait to Crimea. The State Duma passed a bill in the first reading last week concerning regulation of infrastructure construction on the Taman and Kerch peninsulas. Environmental impact assessments will be simplified and public hearings will not be mandatory (Vedomosti, p. 4).
The construction industry in Russia is reviving and banks have become more willing to lend to residential property developers, according to Sberbank CIB. The reduction of interest rates and government subsidies for mortgage loans have helped. However, the situation on the commercial real estate market is more difficult, with office vacancy rates as high as 30% (Vedomosti, p. 11).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Despite the growing penetration of smartphones in Russia, push-button mobile phones remain popular among consumers. Although the overwhelming majority of such phones work only in 2G networks, Russian retailers earned about 5 billion rubles from their sale in the first quarter of 2015. A significant portion of consumers only need voice services and an SMS option, operators acknowledge (Kommersant, p. 1).
Russian television producer Alexander Akopov is divesting his interest in Amedia and will no longer run the film company he founded. He will hand over his stake in Amedia and Media City studio to billionaire Leonard Blavatnik. Akopov will produce serials and TV shows at his new company Kosmos Film (Vedomosti, p. 10).
AUTOMOTIVE & ENGINEERING
Russia's United Engine Corporation will soon see a management shuffle, as CEO Vladislav Masalov will not have his contract renewed when it expires July 17. The most likely replacement is thought to be Alexander Artyukhov, head of the Ufa Engine Industrial Association. He will have to realize plans for import substitution of products manufactured by the Ukrainian defense industry (Kommersant, p. 1).
