Museum Nicholas Roerich, Moscow
Depositors who lost their savings when Russia’s Master Bank was closed down last week can at least hope for some compensation from government-backed insurers. But there’s no light at the end of the tunnel for the museum in Moscow that depends on Master Bank’s now discredited chairman for a living.
Boris Bulochnik has not been seen in public since the Russian central bank revoked Master Bank’s license last week citing “large scale suspicious operations” and a Rbs2bn balance sheet hole. Continue reading »
The battle between Russia and Belarus over potash assets that has roiled global fertiliser markets this year has not thrown Moscow-based Eurochem off track. The Russian agrochemicals group is expanding its international reach with a joint venture to produce fertilizers in China.
Eurochem announced plans on Thursday to enter a joint venture with Toronto-listed Migao Corporation, the China-based specialty potash fertilizer manufacturer, that will open the door to the highly prospective Chinese market for crop nutrients. Continue reading »
By Sujoyini Mandal and Marika Semerdzhian
Gazprom’s traditional economic and strategic business models are coming under tremendous pressure. Shifting LNG trade patterns are impacting spot markets in Europe and Asia, partly as a result of the shale gas boom in the US; lack of investment in new fields is depleting Russia’s gas reserves; and Russia’s domestic gas market is facing market pressures from liberalisation.
There is no doubt that Russia remains a central player in the global energy sector. Vertically integrated, Gazprom controls about half of the country’s proved reserves of natural gas and its export monopoly is enshrined in law. This could change very soon. Gazprom experienced a difficult 2012, with net profits falling by a third in the first half of the year. This comes in the wake of a weaker demand from Europe caused by the economic crisis and perhaps unwillingness to put up with the gas giant. In spite of these challenges, we believe Gazprom is actually positioned to take advantage of, rather than suffer from, rapid changes in the energy industry, both at home and abroad. Here is why. Continue reading »
The Russian parliament dealt Gazprom a blow on Friday, passing legislation that will allow independent gas producers to export liquefied natural gas.
But read the small print of the law and it’s not as bad for Russia’s natural gas monopoly as it sounds. Only two independents will be permitted to muscle into the LNG export business and the scope of their operations will be limited to specific gas fields. Continue reading »
By Ievgen Vorobiov of the Polish Institute of International Affairs
Ukraine’s decision to “suspend preparations” for signing an Association Agreement with the EU will backfire after the Vilnius summit. The announcement was met with palpable disappointment in the EU and placid lack of surprise in Moscow.
Given the dire economic situation in Ukraine, a lack of agreement with the EU augurs ill for Ukraine’s investment climate and energy diversification. Although the government declared its intention to repair ties with Russia, Ukraine’s exporters cannot discard the challenges of weak demand in Russia, which might unleash a new round of trade wars. Continue reading »
Russian collectors are a growing force on the booming global art market, where prices for trophy works are beating all-time records. But it is Russian art that will take centre stage next week as leading auction houses in London offer an eclectic range of important works from the 19th and 20th centuries.
Russian art is not yet fully appreciated by international connoisseurs. But rich Russians can’t get enough of it. They’re prepared to fork out huge sums for a slice of their national heritage. Continue reading »
Firtash: solving problems
Ukraine’s parliament stuck the Yulia Tymoshenko to-do item into the “later” basket on Tuesday, putting off until Thursday a vote on legislation that could set in motion the release of the jailed opposition leader. Her freedom is a key condition set by the EU to sign historic free trade and association agreements next week in Vilnius. Tick, tock.
Yet while Ukraine’s handling of this case of “selective justice” drags on, there was also news out of Ukraine on Tuesday reinforcing the view that Russia – which is pressuring Ukraine to back away from the EU agreements – is meddling in the Ukraine gas market somewhat “selectively”, too. Continue reading »
It’s official: billionaire Suleiman Kerimov, formerly the main shareholder of Uralkali, the Russian potash miner, has sold his stake in the company. The buyer is Onexim Group, controlled by Mikhail Prokhorov, another Russian billionaire best known internationally for his ownership of the US basketball team the Brooklyn Nets.
The main question now is, will the sale lead to a conclusion of the long-lasting dispute between Uralkali and the Belarusian authorities? Continue reading »
Ukraine has stepped back from the brink of another gas war with Russia and resumed gas imports from its powerful neighbour after a one week lull.
It’s a relief for the EU that relies on Ukraine as a transit hub for most of its Russian imports. But reconciliation of the latest gas spat could be part of a poker game that Moscow and Kiev are playing in the run up to the EU summit in Vilnius. Continue reading »
Ouch. After a $1.1bn London IPO last month that had investors queueing up, Russian credit card company TCS will be feeling a bit sore on Friday. It’s GDRs, which had traded as high as $19 following the $17.50 float, have dropped dramatically on Friday – down over 40 per cent at one point, and trading down 26 per cent at time of writing at $11.50.
What’s happened? Reports of a change in Russian credit regulations. Continue reading »
Moscow: the sign says it all
Philanthropy in Russia was killed off in Soviet times, but is making a comeback as the new rich begin to take some responsibility for the welfare of the nation.
However, Russia-based donors hand out paltry sums to charitable causes compared to their counterparts the US, UK and China, according to a report released by Coutts this week. Continue reading »
Partners in wealth
Wednesday’s announcement that Russia and South Korea would work together on an economic project in North Korea slightly overshadowed another significant announcement linked to Putin’s Seoul visit: a new cross-border investment fund between Korea Investment Corporation and its Russian sovereign wealth fund counterpart, the Russian Direct Investment Corporation.
The fund will start out at $500m, with commitments of $250m apiece, but is expected to reach $1bn in time. It also gives an illustration of how the two sovereign wealth funds are evolving. Continue reading »
Should Russians worry more about the budget deficit? Looking at government figures for last year, it is not clear that they should.
The country’s federal deficit was 0.1 per cent of output in 2012; public sector debt was 12.5 per cent of GDP, enviable by western standards.
But a new research paper from economists at the Gaidar Institute and Ranepa, two think tanks, suggest Russia’s total obligations are much more extensive than they appear in the official data. Continue reading »
Russia and Vietnam signed a raft of economic agreements on Tuesday that will strengthen their strategic partnership and counter rising Chinese influence in southeast Asia.
The deals, signed during a visit by Vladimir Putin to Vietnam, will see Russia step up involvement in Vietnamese energy markets and help boost security in the country that has been a close Kremlin ally since Soviet times. “Vietnam has been a long-term, trustworthy partner for Russia and the political dialogue between the two countries is at a high level,” Putin told reporters after talks with Truong Tan Sang, his Vietnamese counterpart. Continue reading »
Gateway to Europe no more?
What do you do if you have a Russian passport, available funds, and want to get long-term travel documents for the Schengen area (the 26 European countries that have abolished passport and immigration controls at their common borders)? For many, over the last three years, the answer has been simple: head to Latvia and make use of its programme of residence permits for foreign investors.
But not for long, perhaps. Immigration legislation is on the agenda, and is the subject of a big poitical debate. Continue reading »