Russia 110811 Basic Political Developments
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- Falling Approval
- Russia May Inject $5.4 Billion to Add Liquidity, Vedomosti Says
- Govt to discuss debt policy till 2014 cuts for residents of SEZ
Industry SlowsIndustrial production advanced 4.8 percent from a year earlier in the second quarter, down from a 5.9 percent gain in the first three months, according to the statistics service. Natural-resources output fell while manufacturing grew. Sales at carmakers such as OAO AvtoVAZ, the country’s largest, continued to surge in the second quarter before the government’s cash-for-clunkers rebate program ended in July. Russia’s economy grew at an average annual rate of 7 percent during Putin’s presidency from 2000 to 2008 before plunging 7.8 percent in 2009. The government forecasts a 4.2 percent expansion this year, slipping to 3.5 percent in 2012, when Russians will elect their next president. Both Medvedev and Putin have said they may run in the March 4 vote.
Consumer-price growth peaked at 9.6 percent in April and May before easing in June. Real disposable incomes fell 2.5 percent in the second quarter. The central bank expects inflation within its 7 percent target, the lowest since the Soviet Union collapsed in 1991. Bank Rossii left interest rates unchanged for a third month in August, citing a balance between risks from inflation and a slowing economy. Central banks in China, India and Brazil tightened monetary policy last month. Economists cited disappointing investment volumes as a reason for lower-than-expected first-quarter GDP growth. Net capital outflows from Russia slowed to $9.9 billion in the second quarter, from $21.3 billion in the first quarter and $34 billion in 2010, according to preliminary central bank data. “Despite high oil prices, capital outflows continued, which speaks to the unstable investment climate and investor caution about Russia,” Yaroslav Lissovolik, chief economist at Deutsche Bank in Moscow, said yesterday by phone. “To boost economic growth rates, Russia needs above all to make the economy more attractive for investment.” To lure investment, Medvedev has pledged to sell stakes in state companies such as OAO Rosneft, the country’s largest oil producer, to reduce the state’s sway over the economy. The economy should pick up in the second half on growth in the agricultural sector, Lissovolik said. So far, this year’s wheat harvest is 11 percent higher than a year ago, while yields are 35 percent better, the Agriculture Ministry said yesterday. Russia endured its worst drought in half a century last year. “The third quarter may be significantly better because of agriculture,” Otkritie’s Tikhomirov said. “A good harvest may drive the economy to 4.5 percent growth.” To contact the reporters on this story: Scott Rose in Moscow at rrose10@bloomberg.net; Alena Chechel in Moscow at achechel@bloomberg.net. To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net.
Russia may inject 160 billion rubles ($5.4 billion) into commercial bank deposits to increase liquidity and help cope with market volatility, Vedomosti reported, citing Finance Minister Alexei Kudrin. To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net 08/11 11:25 RUSSIAN INTERNATIONAL RESERVES AT $537.7 BLN IN WEEK TO AUGUST 5, UP FROM $535.0 BLN ON JULY 29 http://www.interfax.com/ 02:24 11/08/2011ALL NEWS
http://www.itar-tass.com/en/c154/201948.html MOSCOW, August 11 (Itar-Tass) — The Russian government presidium will map out the main areas of the debt policy for 2012-2014 at its meeting on Thursday. The report will be delivered by Deputy Finance Minister Sergei Storchak. According to the ministry’s plans, Russia may borrow 606.1 billion roubles (203.8 billion roubles in 2012, 201.8 billion roubles in 2013 and 200.5 billion roubles in 2014). At the same time, state domestic borrowings in 2012 are expected to be 1,602 billion roubles and in 2014 – 1, 626 billion roubles. At the same time, the Finance Ministry calls “for limiting placement of capital of Euro bonds in roubles in the international market”. “State borrowings will be the main source of financing the deficit of the federal budget, which will persist over the entire planned period,” the document stresses. The volume of the state debt will rise annually over the planned period, reaching 12 trillion roubles by the end of 2014 or 17 percent of the GDP. The Finance Ministry noted that it amounts to 4.6 trillion roubles as of July 1, including the state domestic debt – 3,600 billion roubles and the foreign debt – 36.8 billion US dollars (or one trillion roubles). Later in the day, Deputy Finance Minister Sergei Shatalov will submit draft amendments to the Tax Code, cutting down the tax load on residents of special technology development economic zones. “It is planned to set a tax rate for the tax on profit of resident organisations of special technology development economic zones, subject for deduction to the federal budget equal to zero percent,” the document says. The ministry also suggests “providing for a possibility of establishing by laws of subjects of the Russian Federation lower tax rates for the tax on profit of organisations, subject to deduction to budgets of subjects, but no higher than 13.5 percent”. Interior Minister Rashid Nurgaliev will describe the meeting draft amendments to the budget code, permitting the ministry to make expenses more efficiently to protect participants in criminal judiciary. “A suggested order of finance, material and technical assistance as well as control over outlays, appropriated for state protection, will be implemented within funds, provided for to realise the State Programme for ensuring security of victims, witnesses and other participants in criminal judiciary,” the ministry specified. Deputy Transport Minister Sergei Aristov will describe presidium members draft amendments to the Civil Procedure Code, raising efficiency of juridical protection of rights of crewmembers of Russian sea-going ships. Foreign Minister Sergei Lavrov delivered a report on forwarding to the president a protocol on changes in the Collective Security Treaty for submitting it for ratification. The presidium will also discuss changes of functions of federal departments. For instance the Ministry of Health and Social Development will have powers to render assistance to socially oriented non-commercial organisations, implementing social support and protection of citizens, activities in public health, preventive measures and protection of citizens’ health. It is planned to specify for the State Reserves Agency general principles of forming, deploying, storing, using and supplementing stocks of the state material reserves.
http://www.bne.eu/dispatch_text16336 Alfa Bank August 11, 2011 According to the Federal Customs Service, July non-CIS import growth was only +27% y/y vs. the 40-50% y/y seen throughout 1H11. The resulting slowdown from +48% y/y in 1H11 to 43% in 7M11 amid the recent ruble weakness increases the likelihood of FY11 import growth staying within our 40% y/y growth forecast. In July, non-CIS imports, which accounts for around 80% of total imports, posted a 4% m/m decline, resulting in a slowdown from +48% y/y in 1H11 to +27% y/y in July. The key contributor to the slowdown was the 23% m/m decline in food products thanks to the new harvest this year. Such a seasonal decline did not happen last year due to the severe drought, and thus provided a high statistical base for this year's y/y growth rates. We believe the base effect will continue in 3Q11, and the recent drop in the ruble will provide additional pressure on import volumes going forward, making our +40% y/y import growth forecast for 2011 increasingly likely. Natalia Orlova Russia and the crisis: Market sensitivity to global shocks http://www.bne.eu/dispatch_text16336 Citi
Stress testing the Russian market We consider how the Russian market would look in the event of lower global growth and $80 oil, or a global crisis and $50 oil. The macro drivers Many macroeconomic factors in Russia depend on the level or direction of oil prices, and we identify the key links. We argue in broad terms that 10% lower oil prices would lead to GDP growth 1% lower, a fiscal balance 1% wider, a ruble 4% weaker, and inflation 2% higher. Profit links to global growth Our analysts look at the impact of lower global growth in each sector, ranging from minimal in gold to dramatic in steel. Overall we estimate that RTS index dollar earnings fall by nearly 10% for every 10% fall in the oil price. Russia at $80 oil We believe $80 oil is the new stress point for the Russian market - the level at which investors will start to worry about the macroeconomic framework. At that point we estimate that the fiscal deficit would be 4% of GDP, the ruble would fall to 35 to the dollar, inflation would be over 10%, GDP growth would slow to 2%, and index earnings would be 20% lower than today. This would imply a 2012 EPS decline of 16% and an RTS level of 1,500, roughly what the market is pricing in today. Russia at $50 oil At $50 oil we expect signs of stress in the markets would be much greater, and that investors would worry about political consequences as well. We would expect GDP to decline by 3%, the government to be running a fiscal deficit of 7% of GDP, and the ruble to fall to 40 to the dollar. Index earnings would drop by 60%, and we would expect the RTS to fall to 1,000. High risk stocks Stocks where earnings look most at risk are those with high cyclicality (Mechel, Evraz, Rusal) or high debt levels (TMK, CEDC). Within the oil sector Rosneft is most exposed, and among banks VTB and Vozrozhdenie. Defensive stocks A cyclical market like Russia has few truly defensive stocks when oil prices are falling, with the obvious exception of gold. However, we believe that investors would see outperformance in a crisis from selected oil and gas stocks, as profits would fall by around the same level as in other sectors but valuations are lower. Directory: gifiles -> attach attach -> British Forces – Akrioti, Greece Griffin Fighter Squadron (84 Squadron raf) MoD announced possible Typhoon and Tornado arrivals to the base France attach -> Russia 110204 Basic Political Developments attach -> Unclassified//for official use only attach -> Adaptability Sustainment attach -> Pop-up 1 ("C" Chechnya) Header Text: Emir of the Caucasus Emirate Doku Umarov Image attach -> Russia and Islam are not Separate attach -> Chapter 13: The Northern Caucasus attach -> Russia 100209 Basic Political Developments attach -> The evolution attach -> The devolution Download 299.65 Kb. Share with your friends:
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