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Russia brushed off the threat of western energy sanctions on Friday and pledged to press ahead with plans to build a new gas export pipeline that would strengthen its hold on European gas markets.

Russia is continuing work on the 2,500km South Stream pipeline that will carry gas across the Black Sea to southern and central Europe, Alexander Novak, Russian energy minister told a press conference in Moscow on Friday. Continue reading »

Lukoil has agreed to sell its stake in several oil projects in Kazakhstan to Sinopec for $1.2bn, in the latest of a string of Chinese investments in the country’s energy sector. The Russian company – the country’s largest private-sector oil producer – said the purpose of the sale was to “optimize Lukoil’s overseas hydrocarbon asset portfolio”.

But the deal is also symbolic of China’s rapid expansion in Central Asia, part of Russia’s traditional “sphere of influence”. Continue reading »

There is no doubt that emerging market (EM) investors have cheered up considerably of late. Following a torrid January and February, virtually all asset classes in the EM universe appear – on aggregate at least – to be gaining in value.

The bellwether stock index, the MSCI EM index, is up 9.6 per cent from its low on February 5. EM sovereign bonds are yielding an average of 5.51 per cent, down 0.37 per cent since January 1. Local currency bonds are, in many cases, producing stellar returns sharpened by windfall currency gains. Indeed, some EM currencies are among the world’s best performers, with the Indonesian rupiah rising 7.81 per cent, the Brazilian real gaining 7.3 per cent and the Indian rupee climbing 2.8 per cent so far this year. Continue reading »

By Danylo Lubkivsky, deputy foreign minister of Ukraine

Putin’s aggression against Ukraine had the same effect on the world as the recent Ebola outbreak had on Africa. Everybody knew it was possible but nobody really saw it coming. Once it happened and the initial shock passed, efforts ensued to localise the pandemic. They are scattered at first, and then more sophisticated, but mostly beside the point, for one reason: Russia’s actions are even more irrational than Ebola. Continue reading »

Russia’s shoppers are buying more goods online than ever before. E-retail sales have grown at a rate of around 26 per cent a year and 57 per cent of non-grocery retail spending is now made online.

This may seem odd for a nation that prefers to pay in cash and doesn’t have a reliable postal service, both typically important for e-retail. Attitudes to other payment methods are changing, however, and some home grown businesses have adapted their approach to suit Russian preferences. Continue reading »

Russia is rethinking investor friendly dividend reforms as the Ukrainian crisis weighs on its faltering economy. Rules introduced last year that would oblige state companies to put more of their profits in shareholders’ pockets may be shelved, according to a report out on Wednesday.

Russia has been pushing state companies to pay more generous dividends in an effort to improve the country’s investment image and boost interest in upcoming privatisations. Rules introduced in late 2012 setting a minimum 25 per cent pay out were a step in the right direction but, as often happens with Russian regulations, there was room for interpretation. Continue reading »

Simferopol airport: all change

Ukraine’s aviation market has been badly hit by the political turmoil surrounding Russia’s annexation of Crimea. Airlines have been forced to cut flights and adjust networks due to a significant decline in passenger traffic.

Mid-sized commercial carrier Dniproavia issued a statement on Monday saying it would “optimize the operations grid”. Continue reading »

Russian lawmakers are debating measures to restrict the distribution of foreign films shown at domestic cinemas in a move that reflects growing anti-western sentiment. The threat of a new Cold War is giving Hollywood the shivers.

Robert Schlegel, a member of the pro-Kremlin United Russia party, has tabled a parliamentary bill that would place a 50 per cent cap on the share of foreign-made films distributed at Russian cinemas. Deputies are expected to debate the proposals in the next couple of weeks. Continue reading »

By Ben Aris of bne

When he first assumed power in 2000, the press corps spent the first six months asking one question: “Who is Vladimir Putin?”

At first the media assumed he was a puppet of the oligarchs, handpicked by Roman Abramovich and Boris Yeltsin’s daughter Tatyana Dyachenko, who at the time were effectively running the country. But after Putin moved forcefully to sweep business from the corridors of power and return control of Russia to the centre, everyone had to recalibrate. Continue reading »

By Roland Nash of Verno Investment Research

As the conflict between Russia and the west for influence in Ukraine unfolds, finance has found itself in the unfortunate position of sitting squarely in the front line. From the acceptance by Viktor Yanukovich of a $15bn loan from Russia to the freezing of oligarch bank accounts in the US and Europe, finance has been used as a tool to push the political agenda of both sides.

The immediate consequence has been a fall in the value of Russian assets, the latest of many that have plagued Russia over the past 20 years. If a market correction is the only impact, recent weeks will prove little more than another example of how Russian markets have a tendency to overreact to newsflow. But there could well be a more far reaching impact – and perhaps with rather different consequences from those intended by the US and EU. Continue reading »

A wave of patriotism is sweeping Russia following the annexation of Crimea. But will the euphoria last long enough to have Russians invest in the Black Sea peninsula and support the local economy by holidaying there? Dmitry Medvedev, Russia’s prime minister, chaired a government meeting on Monday to discuss how to make Crimea a going concern.

It sounds like a daunting task. The Kremlin took a huge risk when it redrew the map of Ukraine last week and took possession of Crimea. Western powers have condemned the move as a land grab and are threatening Russia with painful sanctions and decades of international isolation. Continue reading »

By Nick Davidov

The hallmark of the Ukraine crisis is uncertainty – we simply don’t know how it is going to develop. Normally, this would be a drain on confidence. But as the situation stands, investment remains strong, particularly in Russia’s tech sector. This is because Russian tech companies are fully integrated into the global economy – they don’t just sell products and services to western markets. Major players like virtualisation company Parallels Inc and security software firm Kaspersky are particularly strong in emerging markets. Continue reading »

After paying a record bail of $174m, Russia-linked Ukrainian oligarch Dmitry Firtash – arrested last week at the request of US law enforcement – was released from an Austrian prison on Friday on condition that he does not leave the country.

“The last week has been a testing time for my family and me. I would like to thank personally all of my friends and colleagues who have supported me through this difficult period,” he was quoted as saying in a statement upon release.

But Firtash is not off the hook yet. Continue reading »

By Bruce Misamore, former CFO of Yukos

As the world flails about looking for ways to get Russia’s attention over the Ukraine and Crimean crises, and Vladimir Putin looks on impassively, the UK has a unique opportunity to take a long overdue and meaningful action: delist Rosneft from the London Stock Exchange. Continue reading »

As tensions between Russia and Ukraine escalate over Crimea, a new front has opened in the simmering chocolate war. Law enforcers in Lipetsk in southern Russia shut down the Roshen confectionery plant on Thursday, choking off the Ukrainian company’s access to the lucrative Russian candy market.

“Police arrived at the Lipetsk plant on Wednesday morning and took away the keys,” Alexander Zolotarev, press spokesman for Roshen CIS, said. “They sent all the workers home. The plant is closed.” Continue reading »