Moscow press review for October 9, 2013
MOSCOW. Oct 9 (Interfax) - The following is a digest of Moscow newspapers published on October 9. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russia's Finance Ministry is considering a bill to grant a tax exemption for income earned on government securities. The ministry is planning heavy borrowing and a tax break would boost demand for bonds, analysts reckon (Vedomosti, p. 1).
Russia's Economic Development Ministry wants to ramp up investment with money from the National Welfare Fund. If the rules for using NWF resources were relaxed, there would be enough not only for infrastructure, but also for high-tech projects such as in shipbuilding, aerospace and composite materials (Vedomosti, p. 4).
Faced with budget deficits, the Russian authorities have decided to crack down on the shadow sector of the economy. Businesses paying wages under the table could face criminal prosecution and jail time instead of the current fines (Vedomosti, p. 4).
A Russian delegation led by Defense Minister Sergei Shoigu will visit Brazil and Peru next week for talks on military and technical cooperation. Successful negotiations could significantly accelerate the signing of firm arms contracts worth at least $1.7 billion (Kommersant, p. 2).
The APEC summit in Indonesia did not result in any breakthroughs. Countries attending the forum are still not ready to give up key trade restrictions and agreed only to partially ease customs processing. Much of the agenda focused on the regional interests of APEC's biggest economies (Kommersant, p. 8).
OIL & GAS
Gazprom has give Ukraine a 30% discount on natural gas to be pumped into underground storage ahead of the winter, President Vladimir Putin said on Tuesday. However, state company Naftogaz Ukraine will not benefit, as the 5 bcm of discounted gas will go to Dmitry Firtash's Ostchem Group (Vedomosti, p. 1; Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
In another step toward a free floating exchange rate, Russia's Central Bank said it would end forex market interventions of up to $70 million and expand the corridor within which the ruble can fluctuate against the dollar/euro basket from 1 ruble to 3.10 rubles (Vedomosti, p. 10).
Pushkino Bank, which was recently stripped of its license, is being sued for 480 million rubles by investment group Russkiye Fondy. A Moscow court has frozen the assets of the Russian lender's former shareholder Aleksey Alyakin (Vedomosti, p. 11).
Interview: Sergei Bazhanov, President of International Bank of St. Petersburg (Vedomosti, p. 8).
RETAIL & CONSUMER MARKET
Russia's air travel services market could lose another two fairly large players. Red Wings, struggling with leasing debts, plans to halt regular flights later this month. Meanwhile, Yakutia Airlines has run into financial problems and has had one of its aircraft seized in Alaska. Smaller carriers are finding it more and more difficult to compete with the big players, analysts said (Kommersant, p. 1).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
The right to roll out LTE on 2G GSM frequencies, for which Russian regional mobile operators have lobbied for years, will come with a price. The Communications Ministry is proposing operators be required to roll out 4G services in towns with upward of 500 residents (Kommersant, p. 1).
Russian mobile operators are still trying to persuade the government to postpone the introduction of mobile number portability. They say that neither network systems nor the regulatory foundation is ready. But the Communications Ministry is adamant about the December 1 deadline (Vedomosti, p. 10).
Yandex.Market is changing its business model. The Russian product search service will allow users to not only find, but also order products without going to a retailer's website. In future, the company plans to launch noncash payment and possibly delivery. Retailers will pay Yandex 1% of the purchase amount (Vedomosti, p. 11; Kommersant, p. 13).
TRANSPORTATION
Russian Railways (RZD) is facing further constraints on its investment program. In addition to a planned tariff freeze, state lender VEB is refusing to buy 100 billion rubles in RZD bonds, and the Finance Ministry is insisting National Welfare Fund money be allocated for railway projects through bonds, not the purchase of shares in RZD. This could dramatically increase RZD's debt burden and lead to the violation of key covenants of its investment rating (Kommersant, p. 11).