Russia starts asset sale, gets .3 billion for VTB

Russia starts asset sale, gets $3.3 billion for VTB

MOSCOW | Mon Feb 14, 2011 2:19am EST

MOSCOW (Reuters) - Russia kicked off a massive privatization drive, with the country's second biggest bank VTB (VTBR.MM) raising 95.7 billion roubles ($3.26 billion) for the government via a secondary placement.

Russia's Prime Minister Vladimir Putin called the VTB (VTBRq.L) placement a success on Monday, after the bank sold its shares at $6.25 per GDR -- broadly in line with market levels.

"This is ... proof of the trust in the Russian financial system," Putin told VTB CEO Andrei Kostin on Monday.

Funds from the United States, Europe, Middle East and Asia showed interest to the bank's shares, the government said.

Kostin told Putin that that book for the secondary placement was twice oversubscribed.

VTB, a pioneer of Russia's three year massive three-year 1 trillion rouble privatization drive, on Friday closed the books on 10 percent of state-owned shares, with the price reflecting the market.

Italian insurer Generali (GASI.MI) and U.S. private equity firm TPG Capital TPG.UL were expected to buy VTB shares in total worth $400 million.

Sberbank (SBER03.MM), Russia's top lender, will follow VTB later this year or in 2012.

(Reporting by Denis Dyomkin, writing by Katya Golubkova, editing by Toni Vorobyova)

Russia to earn over RUR 95 bln in sale of 10% of VTB stock

http://www.itar-tass.com/eng/level2.html?NewsID=15950878

14.02.2011, 10.19

MOSCOW, February 14 (Itar-Tass) -- Russia will earn over 95 billion roubles in the sale of 10% of VTB stock, the governmental press service reported on Monday.

“The Russian government announced the VTB stock privatization deal closed. Thanks to a keen interest from Russian and international investors the number of bids exceeded twice the supply that allowed selling the stock package at the market price,” the press service reported. “The Russian state will earn over 95 billion roubles in the sale of 10% of VTB stock,” the press service reported, noting that “the sale of the bank stock package became the most successful stock placement on the Russian stock market in the post-crisis period.”
Capital inflows from VTB privatisation will not support the rouble

http://www.bne.eu/dispatch_text14230

Renaissance Capital

On Friday (11 February), the rouble strengthened to 33.99 from 34.09 against the dual-currency basket, dipping to 33.95 during the course of the trading day. Nevertheless, the rouble did not visibly appreciate against the dollar and closed at 29.32. Therefore, the rouble showed no tendency to fall below the level at which the Central Bank of Russia (CBR) doubles its daily interventions (34.00), and was largely driven by rather favourable euro-dollar exchange rate movements. The euro dropped to 1.3535 from 1.3650 by the end of the trading day.

We believe that FX selling should intensify today (14 February) on the back of tax payments, but that rouble appreciation will be slow.

Pension tax payments. Companies will pay RUB200bn of pension tax tomorrow (15 February). This will support the rouble at below 34.0 vs the basket, in our view.

CBR interventions will increase. The CBR will double its interventions when the rouble falls below 34.0 vs the basket and will buy approximately $300mn on a daily basis. Thus, rouble appreciation should be slow.

VTB private placement. There is a widespread view that government privatisation will attract capital inflows, which should strengthen the rouble. However, we do not believe the privatisation of 10% in VTB (we estimate it at $3.3bn) will provide support to the rouble. First, the SPO is being conducted abroad, so local players who may have participated boosted demand for FX, rather than the rouble. Second, the Ministry of Finance is the only beneficiary and will be able to sell FX revenues directly to the CBR or, more likely, will save those funds in the Reserve Fund. Therefore, we are unlikely to see reverse flows in the open market. Although fundamentals, including the balance of payments, will record an increase in FX reserves, we will not see any support for the rouble.

Anton Nikitin

1.6 million people unemployed in Russia

Over the past several weeks the head of state has repeatedly addressed this issue and promised to keep a close watch on unemployment rates.

"Of late we managed to reduce the unemployment rates and bring the employment dynamics to the pre-crisis level.

Nevertheless, a great number of people remain jobless. But the main thing is that it is necessary to learn how to manage these processes," Russian President Dmitry Medvedev said.

Deputy Prime Minister Alexander Zhukov briefed the president last week that the most difficult situation with unemployment was registered in 2009, when the total number of those jobless reached up to 9.2 per cent of the country''s active population.

Medvedev praised regional employment programs that helped 200,000 people to start their own businesses and use statesubsidies.

At present, such programs focus on self-employment, employment of disabled persons and vocational retraining.

Employment in the so-called one-industry towns that made up around 200 all over the country remains high on the agenda.

The head of state instructed the government to specially control the situation in this sector.

According to the Cabinet''s plans, in 2011 the unemployment rates in these towns should reduce to 2 per cent.

Earlier the Kremlin''s top economic adviser, Arkady Dvorkovich, stressed the need for drafting own development programs in one-industry towns. (Itar-Tass)