Russia’s finances are being squeezed by a contraction in economic growth and faltering oil prices. So what better time for Russia to demand bigger dividends from its powerful state companies?
New rules forcing the likes of Gazprom, Rosneft and Sberbank to share more of their profits with investors will land an extra $8bn in the Russian budget in 2014 and continue to boost state coffers for years to come, according to a report by Markit Equities Research, the financial information services company. Continue reading »
It was in 1974 that Yuri Mamleev, a Moscow dissident author, finally decided he had had enough of being banned from publishing. He and his wife took a decision that was then increasingly common for Soviet intellectuals – they emigrated.
Mamleev was part of the so called “third wave” of USSR emigration – the first wave left in the 1920s fleeing the Bolshevik takeover, the second escaped from World War II, while the third, Mamleev’s generation, was driven out mainly by censorship.
And today there may be the beginning of a fourth wave. Economist Sergei Guriev’s flight to France last month may revive the controversial tradition of political exile. Continue reading »
Norway has been producing oil offshore since the 1970s and hardly needs help from relatively inexperienced Russia.
So presumably it’s for strategic reasons that Norway’s energy ministry decided this week to award Russian oil companies rights to explore on the Norwegian continental shelf for the first time. The two countries do after all share an offshore frontier. Continue reading »
It’s curious to see where the three Soviet-born tycoons who sold their 50 per stake in TNK-BP to Rosneft this year will invest the proceeds of the deal. While some are tempted to stick to oil, Leonard Blavatnik, the chairman of Access Industries, has branched out into the booming Russian e-commerce industry, buying a stake in Lamoda, the online fashion retailer. Continue reading »
By Marcos Troyjo of Columbia University
The creation of the Brics Development Bank, announced during the Brics Summit in South Africa in March, is a key move towards giving some backbone to the Brics as a group. The five nations will again work on setting up the Bank as they hold a parallel meeting to the G-20 gathering in St Petersburg in September.
The BDB is not being designed to compete with traditional institutions such as the World Bank and other multilateral agencies. Quite the contrary, its motivation is to perform a complementary role to existing Washington-based institutions. It should be welcomed by the entire international community – and particularly by the Brics themselves. It will allow them to show that their constructive capacity is for real. Continue reading »
Russian central bank governor Sergey Ignatyev on Monday completed his last rate-setting meeting with his hawkish reputation intact.
In line with expectations, the bank left key policy rates on hold, though it eased medium-term borrowing costs in a move which was seen a a signal of a coming relaxation in monetary policy. Continue reading »
Rosneft has been warning minority shareholders in TNK-BP not to expect any favours, ever since it took over the Anglo-Russian oil producer. All the same, it’s a disappointment for these shareholders – who have regularly received fat payouts – to learn on Thursday that they won’t be getting any dividends this year.
Minority shareholders – mostly foreign long term investors – hold around 5 per cent of TNK-BP Holding, the listed unit of TNK-BP, that was acquired by Rosneft together with the parent company in a deal announced last year and completed this March. Continue reading »
By Ben Aris of bne
Potash is big business. Developing a major deposit costs billions of dollars and there are only a handful of viable deposits scattered around the world. Yet over the past two decades it has been a quiet business. Three companies – Uralkali in Russia, its partner Belaruskali in Belarus and PotashCorp in Canada – account for just under three-quarters of global production.
However, things have started to change. Continue reading »
By Marcus Svedberg of East Capital
One should be careful in drawing parallels between seemingly similar events in different countries. But there are a number of striking similarities between the protests in Turkey and the recent events in Russia.
These are two radically different emerging markets but there are common denominators among the protestors, the regimes, and in the triggers for the unrest. One conclusion is that the protests are not about economics: but economic development does help to explain why these tensions have emerged now. And that raises the old question – does economic development foster democracy? Continue reading »
Heavyweight banker Andrei Kostin has waded into the debate about the Kremlin-led pressure on Russian companies to boost dividends.
Speaking on Wednesday at a St Peterburg banking conference, the chief executive of state-controlled VTB suggested banks should be allowed to pay some of their dividends in shares.
Given his elevated status and political contacts, Kostin would not have gone public if he thought his proposal would be shot down. So expect some tough talk: the Kremlin wants bigger payouts from state-run groups but the banks want to keep their cash. Continue reading »
By Ben Aris of bne
There was high drama at Sberbank‘s AGM on Friday when celebrity economist Sergei Guriev was voted back on the board of the big Russian state-controlled bank despite having fled the country at the weekend in fear of arrest.
Guriev said earlier that he had withdrawn his name from the list of candidates, but the head of Sberbank’s legal department told journalists ahead of the vote that it was too late the remove Guriev’s name from the ballot. The result is an embarrassment for the authorities even if Guriev doesn’t return to Russia any time soon. Continue reading »
What’s the top performing emerging market currency of the past month? While almost every other currency has fallen against the surging US dollar, the Hungarian forint has more than held its ground, strengthening by around 2 per cent since April 30.
That mightn’t sound like much. But, as Societe Generale says in a report on Friday, the HUF is one of only two EM currencies to have posted gains in the past month, along with the renminbi.
For Soc Gen, that’s a sell signal. But for others it’s a tribute to the recent goodish news about the Hungarian economy. Continue reading »
Sistema, the Russian conglomerate, has nominated Lord Mandelson (left) to its board in what is clearly a move to tap the British peer’s public relations skills.
Russian companies set great store by corporate PR to counter the country’s dismal international image. But billionaire controlling shareholder Vladimir Yevtushenkov will be hoping that not too many people recall how his lordship’s ties with another Russian oligarch, Oleg Deripaska, ran into political controversy. Continue reading »
Russia has not been the Eldorado that international oil majors hoped when it opened up to outside investors after the Soviet Union collapsed. But that has started to change as Rosneft, Russia’s powerful state oil company, moves outside its comfort zone and begins to explore in remote and challenging offshore areas. In the latest of a string of foreign deals, Rosneft has teamed up with Japan’s Inpex to explore waters off Russia’s far eastern coast. Continue reading »
A contraction in Russian economic growth is taking a toll on consumer confidence. But while Russian shoppers are spending more carefully, it appears they can’t say ‘no’ to their kids. Detsky Mir, the country’s biggest children’s goods retailer, is anticipating a double-digit increase in revenues in 2013 for the second year in a row and is confident enough about the outlook to begin planning for an initial public offering. Continue reading »