Moscow press review for December 24, 2013
MOSCOW. Dec 24 (Interfax) - The following is a digest of Moscow newspapers published on December 24. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian government has approved changes to the investment mandate of the National Welfare Fund allowing up to 10% of the fund to be invested in risky bonds of foreign governments. This indicates that up to $9 billion of NWF money can be invested in Ukrainian Eurobonds. In order to meet the promise of lending Ukraine $15 billion, the Russian government will have to look for other sources of financing (Kommersant, p. 1; Vedomosti, p. 4).
Two members of punk group Pussy Riot were released from prison Monday under an amnesty announced by the Russian authorities. Their release follows that of four protestors arrested in the Bolotny case. Those involved in high-profile cases are being released quickly, while the release of others might be dragged out, one expert fears (Vedomosti, p. 2).
Interview: Oleg Savelyev, Deputy Economic Development Minister of Russia (Vedomosti, p. 8).
OIL & GAS
Novatek, Russia's leading independent gas producer, plans to double its liquefied natural gas production capacity by building a second plant on the Yamal Peninsula. The resource base will be fields on the Gydan Peninsula and Ob Bay, which have already received tax breaks. Gazprom will not be involved in this project, the first phase of which could be launched in 2022 (Kommersant, p. 9; Vedomosti, p. 11).
President Vladimir Putin on Monday came to the defense of oil companies in their dispute with Russian Railways (RZD), which intends to raise shipping rates for crude oil and oil products. As a result, Economic Development Minister Alexei Ulyukayev proposed abandoning the liberalization of tariffs and taking away RZD's right to adjust them (Kommersant, p. 7).
METALS & MINING
Mechel, the troubled Russian coal and steel group, is preparing to announce its second asset selloff in two years. The company wants to raise $1 billion to reduce its $9 billion debt. It might offer to sell a minority stake in the project to develop the huge Elga coal field (Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
The Russian Central Bank's purge of the banking sector is not just benefiting state banks by drawing deposits away from their private rivals. In the past four month, and just in major bank failures, state banks secured the right to make 70% of all retail deposit insurance payments of this year (87.6 billion rubles), and consequently the opportunity to retain half of this money in deposits at their own branches (Kommersant, p. 1).
The best forecasters of last year were the owners of the Alora Group and Otkritie FC, Anatoly Gavrilenko and Vadim Belyaev, who correctly predicted the Russian stock market's stagnation in 2013. Two dozen senior executives and shareholders of leading stock market players annually get together to bet on where the MICEX and RTS indexes will be at the end of the following year (Vedomosti, p. 1).
RETAIL & CONSUMER MARKET
Responding to President Vladimir Putin's demand to clean up the online retail sector, Russia's Finance Ministry is proposing to reduce the threshold for duty-free purchases from foreign online retailers to 150 euros from the current 1,000 euros. This is still more than Russian shoppers' average purchase at online stores, which an industry association estimates at 45-100 euros (Kommersant, p. 1; Vedomosti, p. 10).
Prime Minister Dmitry Medvedev has signed a resolution to reduce the quota for the share of foreign workers at retail chains to 15% from 25% in 2014. Some retailers are preparing to seek staff in neighboring regions by offering free dormitory space, while others intend to continue hiring foreign workers through intermediaries under the threat of fines (Kommersant, p. 7).
The owner of the Eksmo publishing group, Oleg Novikov has closed a deal to buy 95% of the rival AST group. Together these companies publish one in every five books in Russia. Including dividends, AST shareholders could get about $70 million for the whole publishing business (Vedomosti, p. 11).
REAL ESTATE & CONSTRUCTION
Businessman Ruslan Baisarov, who is developing the Elegest coal field, has bought a 30% stake in Stroygazconsulting, a major Gazprom contractor, from Ziyad Manasir, reportedly for $4.8 billion. Baisarov intends to have the company build a railroad to Elegest, a project worth 200 billion rubles that will keep the construction company busy despite problems with Gazprom (Kommersant, p. 7).
AUTOMOTIVE & ENGINEERING
E4, the engineering group founded by Mikhail Abyzov, and state nuclear corporation Rosatom are in talks to form a joint engineering company. The 50-50 joint venture would include all of E4's assets and units of Rosatom's engineering holding company Atomenergomash and NIAEP - Atomstroyexport (Vedomosti, p. 10).
AGRICULTURE & FORESTRY
Japanese companies might get land and tax breaks to develop agriculture in Russia's Far East. The Russian government is considering creating agribusiness special economic zones in the Far East. The Economic Development Ministry is in talks on one such zone with Japanese investors, who have already planted soybeans and buckwheat on a trial basis in Amur Region (Vedomosti, p. 1).