Moscow press review for March 23, 2015
MOSCOW. March 23 (Interfax) - The following is a digest of Moscow newspapers published on March 23. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian authorities, wanting to make life easier for exporters, are proposing to allow the biggest companies to obtain excise refunds as quickly as they get VAT refunds, and in a declarative process. The relevant tax code amendments have already been drafted and endorsed by the government. The main beneficiaries of the change will be oil companies (Vedomosti).
The growth of factory gate prices in Russia's manufacturing sector has almost caught up to consumer price inflation, reaching 14.7% in annual terms in February 2015, Rosstat reported. The decline of domestic demand should slow the price growth, but given the oligopoly on most Russian resource markets this might not be the case. Overall producer prices jumped 2.1% in February, pushing annual producer price inflation to 9.1%, the highest figure since September 2012 (Kommersant, p. 2).
Representatives of big business might be invited to join the Russian government's anti-crisis commission for economic development and integration, which is chaired by First Deputy Prime Minister Igor Shuvalov, according to instructions issued by the prime minister. The commission already includes the heads of leading state banks (Vedomosti).
OIL & GAS
EU leaders have backed the European Commission's plans for an Energy Union, which could cause more problems for Russia than the Third Energy Package approved in 2009. According to the plans, the EC will get the right to directly influence commercial agreements on gas supplies, including the contracts of Gazprom, which could further worsen the Russian gas giant's positions in Europe (Kommersant, p. 1).
METALS & MINING
Prime Minister Dmitry Medvedev last week signed an order to grant an exploration and development license to the Maslovskoye platinum, copper and nickel deposit to Norilsk Nickel. It took the Russian mining giant over five years to get the authorities to issue the new license to correct a mistake in the coordinates of an earlier license that left the deposit's main ore body outside the license boundaries. The company said earlier that it plans to invest 85 billion rubles in the deposit's development (Vedomosti).
Rusal plans to list its shares on the Moscow Exchange in the near future and is winding down its Russian Depositary Receipts program. The main goal is to get the Russian aluminum giant's shares on the MCSI Russia index, which would attract investment from index funds. However, analysts question whether Rusal's small free float will be enough to secure a place on the index (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
Prime Minister Dmitry Medvedev has ordered the finance and economy ministries, Central Bank and Deposit Insurance Agency to elaborate possible changes to the rules and conditions for paying deposit insurance. The head of Russia's national savings bank Sberbank, German Gref has proposed a deductible of 10% that depositors would have to pay in order to encourage them to put their money in reliable banks, not just those that offer the highest interest rates (Vedomosti, p. 1).
The number instances of Russian banks foisting life and health insurance on retail borrowers is growing, the Federal Anti-Monopoly Service said. The regulator plans to close the legal loophole and introduce fines on banks for such practices. Banks claim that only "small, unscrupulous players" pressure borrowers to buy insurance (Kommersant, p. 1).
Prices for mandatory third-party liability car insurance in Russia will go up by 40-60% on April 12. The Central Bank hopes this will encourage insurance companies to return to regions they have left and not shirk payment of compensation to accident victims. While some insurers say the price increase is insufficient, critics warn that it will push some drivers to stop buying insurance and risk being fined (Vedomosti).
The share of apartments purchased with mortgage loans in Russia has fallen by at least half compared to a year earlier, real estate companies report. Demand for mortgage loans has fallen sharply with the spike in interest rates, and the number of mortgage applications tumbled by 53% year-on-year in January and 72% in February by one estimate. But demand is expected to increase as interest rates have dropped somewhat and banks are launching mortgage programs with subsidized rates (Vedomosti).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russia's Communications Ministry has drafted measures to curb the steep growth of prices for paper for the printing industry. In addition to imposing duties on paper exports, it is proposing to allow duty-free paper imports. Meanwhile, the zero import duty on finished printed products might be raised to 5% to encourage publishers to print magazines in Russia. Publishers doubt that these measures will have a real impact (Kommersant, p. 7).
Interview: Sergei Andreyev, CEO of ABBYY (Vedomosti).
TRANSPORTATION & LOGISTICS
Russia's air travel market is contracting. Passenger traffic fell 4.1% in February and 1.3% in the first two months of 2015. The growth of traffic on domestic flights was no longer enough to offset the slump on international routes. Analysts believe the trend is systemic and long-term, noting that the growth of domestic passenger numbers is being driven mainly by flights to Crimea (Kommersant, p. 9).
AUTOMOTIVE & ENGINEERING
General Motors, which is pulling out of Russia, has offered to sell Opel and Chevrolet vehicles from its inventory to dealers at a discount of 25-30%. However, not all dealers are eager to take advantage of the offer (Vedomosti).
Russia's GAZ Group, which is controlled by billionaire Oleg Deripaska, plans to start exporting its light commercial vehicles to Europe by the end of 2015, beginning with Serbia. GAZ hopes to eventually sell about 15,000 LCV per year on the European market, largely in the Balkans. The company expects its overall exports to grow 47% to 25,000 vehicles in 2015 (Vedomosti).