Moscow press review for February 3, 2014
MOSCOW. Feb 3 (Interfax) - The following is a digest of Moscow newspapers published on February 3. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
A bill that would bar people in Russia from running for elected office for 10 years or 15 years after the expungement of a criminal conviction, depending on the severity of the crime, has been prepared for a second reading in the State Duma. Legislators have expanded the bill so that information about all past convictions will be stated in all election documents, including voting ballots (Kommersant, p. 1).
OIL & GAS
Ukraine's gas debt grew by a quarter to $3.35 billion in January. Officials at Russian gas giant Gazprom do not believe the company will be paid in full and are again talking about requiring Naftogaz Ukraine to pay in advance. Russia might grant Ukraine another deferment, but it might also reconsider the price of gas (Vedomosti, p. 1).
Gazprom is considering bidding in a tender for offshore development in Tanzania, which hopes to become a major liquefied natural gas exporter. The Russian gas giant, for which this would be the first project in East Africa, is interested in creating a base for shipments to the rapidly growing Indian market, analysts reckon (Kommersant, p. 9).
UTILITIES
Russia's Federal Tariff Service is proposing to introduce a monthly "subscription fee" as a charge for electricity delivery. Households that already pay for power would not pay more, while owners of empty investment properties or summer homes, who pay nothing, would thus offset power grids' costs for connecting them (Kommersant, p. 1).
The Russian authorities intend to dramatically tighten control over the housing and public utilities sector. Property management companies will be obligated to obtain licenses and reimburse households for poor quality services. The Construction and Housing Ministry, which estimates the market for such services at 4 trillion rubles annually, has drafted the relevant bill (Vedomosti, p. 4).
BANKING, FINANCE & INSURANCE
Former Finance Minister Alexei Kudrin has agreed to run for the post of chairman of the supervisory board at the Moscow Exchange, where he would replace Central Bank first deputy chairman Sergei Shvetsov. Kudrin's key objective might be to boost the exchange's market capitalization ahead of the sale of the Central Bank's stake (Kommersant, p. 1; Vedomosti, p. 11).
Russia's Central Bank did not heed requests to bail out My Bank and instead revoked the lender's license on Friday. Some 90% of My Bank's assets have disappeared and its accounts turned out to be false, so the regulator did not find anything to save, the head of the Deposit Insurance Agency said (Vedomosti, p. 10).
Russia's financial market had its worst January in five years. The ruble depreciated by 5%-6.5% against the euro and dollar, investors pulled $500 million out of Russia-focused funds, and stock market indexes tumbled 2.7-10%. Russia will have to restore economic growth rates and carry out structural reforms in order to draw back international investors, analysts believe (Kommersant, p. 7).
RETAIL & CONSUMER MARKET
The Russian government has approved in principal the introduction of a limit for duty-free imports of personal goods in the amount of 150 euros per package, rather than per month as planned earlier. The current limit of 1,000 euros per month has helped promote the rapid growth of Russian consumers' purchases from foreign online retailers (Vedomosti, p. 11).
VTB Capital and Goldman Sachs closed a deal Friday to buy 50% of Russian Fitness World, which operates the World Class and Fizkult fitness clubs. The stake, which could have cost $100 million, included the interest held by Alfa Capital Partners and some of the shares of Olga Slutsker and Maxim Ignatyev, who have retained an interest in the business (Kommersant, p. 7; Vedomosti, p. 18).
REAL ESTATE & CONSTRUCTION
Demand for residential properties in new developments has increased considerably in Russia due to the weakening of the ruble. However, real estate prices have not changed much yet. The dollar price index for homes in Moscow even dropped 1% last week (Vedomosti, p. 1).
Heritage activists have managed to overturn a controversial order by the St. Petersburg authorities to allow Gazprom to develop Okhta Cape, where archaeological monuments have been found. Gazprom had planned to build commercial and residential properties on the site of the suspended Okhta Center skyscraper project in order to recover the 7.2 billion rubles invested in it (Kommersant, p. 3).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
The joint venture between national operator Rostelecom and mobile provider Tele2 Russia, T2 RTC Holding, will be headed by Mikhail Noskov, a director on the board of Rossiya Bank who worked for about ten years at companies controlled by steel magnate Alexei Mordashov. However, Noskov might only head the venture temporarily during a transition period (Vedomosti, p. 10).
Rostelecom's job of bringing Internet services to towns with 250-500 residents, including remote ones, might be made easier. The Communications Ministry is proposing to allow the national operator to connect small towns with radio relay lines and VSAT, not just fiber optic lines. This would reduce costs, but could negatively impact the quality of services (Kommersant, p. 10).
AUTOMOTIVE & ENGINEERING
The private investors in Kalashnikov are taking over management of the troubled Russian arms maker. One of the company's new shareholders, Aeroexpress head Alexei Krivoruchko has been named CEO of Kalashnikov. The appointment has been endorsed by state corporation Rostec and Deputy Prime Minister Dmitry Rogozin (Kommersant, p. 1).
