Moscow press review for June 25, 2014
MOSCOW. June 25 (Interfax) - The following is a digest of Moscow newspapers published on June 25. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russian President Vladimir Putin on Tuesday asked the Federation Council to repeal a March resolution authorizing him to use Russia's armed forces in Ukraine. His spokesman said the request was aimed at "normalizing the situation" and resolving the conflict in southeastern Ukraine and was made in light of the "start of trilateral negotiations on this issue" (Kommersant, p. 1; Vedomosti, p. 1).
The development and introduction of the new taxation regime for controlled foreign companies might be gradual, the head of Russia's leading business lobby said on Tuesday. Even with the Finance Ministry's willingness to ease its version of the CFC bill, the Economic Development Ministry is insisting on the need to change the concept of the bill and provide a transition period (Kommersant, p. 3).
The Russian prime minister has signed off on a Global Education program that will give Russian students the opportunity to study abroad with government funding. However, grant recipients will have to return and work in Russia for three years, in most cases not in Moscow. The government is prepared to spend 4.4 billion rubles on the program in 2015-2017 (Vedomosti, p. 4; Kommersant, p. 4).
Interview: Alexei Ulyukayev, Economic Development Minister of Russia (Vedomosti, p. 8).
OIL & GAS
Gazprom is changing the terminus of the future South Stream gas pipeline to Austria instead of Italy. The Russian gas giant and OMV signed an agreement Tuesday on the construction of the pipeline in Austria, despite European Union opposition to the project (Vedomosti, p. 11).
UTILITIES
The European Union has launched a campaign to use western fuel at Russian-designed nuclear power plants in Eastern Europe. As a result, Russian state company Rosatom could lose part of a market worth over $1 billion annually to Westinghouse, currently the only alternative supplier (Kommersant, p. 7).
BANKING, FINANCE & INSURANCE
President Vladimir Putin's surprise decision to give up his mandate to use Russia's armed forces in Ukraine gave a boost to Russian assets. The ruble rose to a five-month high against the dollar and euro on Tuesday, while the RTS and MICEX stock market indexes gained 3.8% and 2.2% respectively. The stronger ruble also lifted bond prices (Vedomosti, p. 11).
Even as Russians' ability to get loans is declining due to the dramatic growth of their debt burden, banks are finding new ways to continue lending. Borrowers who can no longer qualify for a mortgage, for example, are being offered residential real estate leasing - at a substantial premium to mortgages. The first major player to enter this market is the state-controlled VTB Group (Kommersant, p. 8).
Interview: Dmitry Olyunin, CEO of Rosbank (Kommersant, p. 10).
RETAIL & CONSUMER MARKET
Belarus might impose restrictions on imports of home appliances and electronics from Russia. Vendors and manufacturers, facing problems with shipments to a market worth $600 million annually, are lobbying the Belarusian president and Eurasian Economic Commission, but the latter's ability to influence the situation is limited and a resolution could take years (Kommersant, p. 1).
The leader of the Russian Pensioners Party has submitted a package of bills to the State Duma that would change the rules of the game on the advertising market, which reached 328 billion rubles in 2013. It proposes to lift restrictions on the sale of over 35% of all TV ads by one seller, ban ads on pay TV channels and allow beer ads on sports channels and in the press (Kommersant, p. 1).
U.S. pharmaceuticals company Abbott has reached an agreement to buy Veropharm in a deal that values the Russian drug maker at 17 billion rubles. Principal shareholder Roman Avdeyev, who has owned Veropharm for less than a year, could earn at least 5.8 billion rubles in the deal. Veropharm's shares shot up nearly 40% on Tuesday (Kommersant, p. 9; Vedomosti, p. 10).
Guta Group will soon become the sole owner of United Confectioners after buying the Moscow government's 26.58% stake in Russia's largest candy company. The city had tried to sell the stake for years but could not reach an agreement with potential buyers, who included Nestle and Kraft Foods, due to the high price. Analysts reckon Guta might be paying at least 3.4 billion rubles (Kommersant, p. 7).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
MegaFon, Russia's second largest mobile operator, has not reported subscriber churn figures for some time. This figure was about 12% in the first quarter of 2014, which was more than at chief rival MTS, but less than at Vimpelcom. The top three operators could see churn increase with the formation of a fourth national operator by Rostelecom and Tele2 Russia, which has more loyal subscribers (Vedomosti, p. 10).
Russian legislators, following the example of the European Union, have submitted a bill to the State Duma to obligate Internet search engines and social networks operating in Russia to remove personal data at users' request. They also want to force them to store and process personal data within Russia. Violators would be put on a new register similar to the blacklists of banned websites and blocked until they comply (Kommersant, p. 1; Vedomosti, p. 16).