Moscow press review for November 9, 2012
MOSCOW. Nov 9 (Interfax) - The following is a digest of Moscow newspapers published on November 9. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Andrei Vorobyov, leader of the United Russia faction in the State Duma, has been appointed acting governor of Moscow Region until elections are held next year. Vorobyov, a friend of former governor Sergei Shoigu, will continue the projects begun by his predecessor. Vorobyov's association with the popular Shoigu is expected to help him win next September's election (Kommersant, p. 1; Vedomosti, p. 1).
OIL & GAS
Some 40% of Gazprom's long-term contracts to supply gas on the Russian domestic market expire next year. The state-controlled gas giant could therefore potentially lose contracts to supply nearly 90 bcm of gas. Gazprom has been steadily losing domestic customers in recent years (Vedomosti, p. 1).
The rival shareholders of TNK-BP, Russia's AAR consortium and BP, have agreed to resume the normal work of the oil company's board of directors, which was blocked by their dispute. The new understanding could help AAR strengthen its position at TNK-BP while state oil major Rosneft consolidates BP's 50% stake and before it buys out the consortium's 50% stake (Kommersant, p. 9).
METALS & MINING
Magnitogorsk Iron & Steel Works (MMK) is scaling back capital expenditures in order to boost profitability. Rivals Severstal and Evraz have abandoned foreign expansion for the same reason. MMK's new strategy to 2022, to be reviewed by the board in December, will aim to make the company the industry leader in terms of production costs (Vedomosti, p. 7).
Russian steel companies have not yet managed to secure reduced natural resource extraction tax rates for mining coal and ore in remote regions. The government is demanding they provide rationalizations for tax breaks for specific projects in the first quarter of 2013. Companies are not ready to provide exact figures for most projects (Kommersant, p. 11).
BANKING, FINANCE & INSURANCE
Russian banks this year, for the first time since the financial crisis, have raised twice as much with Eurobonds as companies: $25.8 billion compared to $12.3 billion in the first ten months of 2012. More than 40% of the bonds were subordinated, meaning they can be included in capital, requirements for which were tightened by the Central Bank (Vedomosti, p. 7).
For the first time in more than a decade, the Federal Financial Markets Service has intervened in the rate policy of registrars, setting a cap on the price of some services provided to investors. However, the regulator has decided not to impose restrictions on the price for services that generate about a third of registrars' revenues, those concerning changes of ownership in the register (Kommersant, p. 10).
RETAIL & CONSUMER MARKET
Consumer electronics retailer Media Markt has become the first chain in Russia to begin introducing technology that makes it possible to track all goods in all stores. The company will begin testing RFID (Radio Frequency Identification) in mid-November (Vedomosti, p. 1).
A court in Lviv has frozen all the Ukrainian assets of IDS Borjomi based on a submission from Russia's Investigative Committee, which is looking for the trail of exiled oligarch Boris Berezovsky in assets managed by Britain's Salford Capital Partners. Salford and IDS believe this will not affect the search for buyers for IDS Borjomi, 100% of which is up for sale (Kommersant, p. 1).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Uzbekistan will not nationalize the local subsidiary of Russian mobile operator MTS. The Uzbek authorities are willing to take cash. A Tashkent appeals court has overturned an earlier ruling to seize and nationalize Uzdunrobita's assets, but the company has been ordered to pay the government about $600 million within eight months (Vedomosti, p. 7).
Ahead of its IPO in London, Russian mobile operator has released strong quarterly results, showing net profit up 19.6% year-on-year to 14.9 billion rubles in the third quarter on revenue up 12.3% to 71.2 billion rubles and OIBDA up 3.2 percentage points to 45.1%. However, investors are expecting not only good financial results, but also a substantial discount on its share price (Vedomosti, p. 11).
TRANSPORTATION
Government officials are proposing that Russian Railways (RZD) use part of the proceeds from the sale of a 25% stake in Freight One to subsidize passenger services and borrow more going forward. RZD's management does not want to sink further into debt (Vedomosti, p. 8).
AUTOMOTIVE & ENGINEERING
The Russian government on Thursday approved a shipbuilding development program to 2030 that calls for investing nearly 338 billion rubles of government money just in the civilian sector. The program puts an emphasis on equipment for development of offshore resources, icebreakers and the fishing fleet (Kommersant, p. 11).