Bank of Moscow Still Gets City's Cash

Uranium One posts 450% increase

The results were released in Canada late on Monday, missing the JSE’s trading session, and local shareholders could only trade on the data yesterday because of the public holiday on Tuesday.

Uranium One, which has mines in Kazakhstan, Australia and the US but none in SA and is majority controlled by Russian state-owned nuclear group ARMZ, was up as much as 34% on the JSE yesterday and closed 17% higher at R22,75.

Bloomberg described the share’s performance on the JSE as its best in nearly three years.

Uranium One posted a 450% jump in net earnings for the second quarter to end-June of $29,7m as production grew by a third to 2,4-million pounds of uranium.

Revenue was 71% higher at $113m and it sold 2-million pounds of uranium at an average of $58/lb. It had a total cash cost of $15/lb.

"This quarter saw a continued low cash cost with a higher than expected market average sales price," said CEO Chris Sattler.

Uranium One expects demand for uranium to come down by between 8% and 10% for the remainder of this decade, said Scott Melbye, the company’s executive vice-president of marketing.

The earthquake and tsunami in Japan in March, which damaged the Fukushima nuclear reactor and drove uranium prices down to $49/lb, resulted in safety reviews and stiffer regulations around the world. The price has since stabilised at about $50/lb.

"Projected future demand should still result in a favourable environment for low-cost producers such as Uranium One," Mr Melbye said in a presentation on Monday.

China, India and Russia have not changed their plans to build nuclear reactors, and there has been growth in other areas such as Saudi Arabia, which has said it plans to build 16 nuclear power plants by 2030.

seccombea@bdfm.co.za

http://www.rbcnews.com/free/20110811105619.shtml

      RBC, 11.08.2011, Moscow 10:56:19.The board of directors of United Aircraft Corporation (UAC) has passed a resolution on increasing the company's share capital by placing additional ordinary registered bookentry shares by public subscription. The issue is expected to consist of 2.7bn shares with a par value of RUB 1 (approx. USD 0.03). The board of directors has already approved the securities prospectus for the issue, the aircraft producer said in a statement today.

France’s SNF-Group invests €25m in Russia

Posted 11 August 2011 8:12 am GMT

France-based SNF-Group, one of the world’s leading producers of polyacrylamide, is investing RUB1bn (€25m) in its Russian company – Saratovorgsintez – which is part of Lukoil.

Saratovorgsintez is based in the Saratov region, currently the only place in Russia which produces acrylonitrile, a raw material used to produce polyacrylamide.

At present the share of SNF-Group in the world market of polyacrylamide is estimated at 35%.

Russian Post in blazing row with antitrust chief

A major row has erupted over the last week between Russian Post and Russia’s antitrust regulator, the Federal Antimonopoly Service (FAS), after new proposals were put forward to liberalise the postal market.

The FAS filed a new version of its previous liberalisation proposals last Thursday. The bill – titled “On Postal Communication” – seeks to update legislation that has been in place since 1999, and would seek to open up the postal market to private competition.

Similar proposals have been in discussion for a while, but could now be considered by the federal government as early as September.

But Russian Post said this week that the FAS proposals could threaten the very existence of postal services for the 37m Russians living in remote areas.

Particularly in the far north of Russia, the Post said it was the only company providing any deliveries, with transport difficult, and where 3,500 post offices are located in places where no other organisation exists.

Alexander Kiselev, Russian Post’s Director General, said the mail service was serving an important social mission above and beyond the need to make profit.

“In the most remote corners of our country, we deliver mail, periodicals, products, and accept payments and money transfers – not because it is profitable, but because it is necessary for people,” he said.

“Competitors to the mail service are only interested in the big cities – there are not interested, for example, in the far north because our work in those regions is not profitable.”

“Slow dive into a swamp”

Artemyev said unless other companies were allowed to deliver letters in competition with Russian Post, there would be a “slow dive into a swamp” for the postal sector.

In reply, Russian Post suggested the FAS chief was lobbying for private companies – to the detriment of the public interest.

The Post argued that not only had it been a part of the government work group that drafted market reforms ten years ago, but in terms of its service efficiency, it is currently engaged in a major modernisation and improvement programme.

However, Russian Post pointed out that the FAS proposals would allow private competitors to cherry-pick the most profitable routes, which were needed by Russian Post to subsidise deliveries in remote areas, since postal rates are set below-cost by the federal government.

Russia’s Communications Ministry backs Russian Post’s position, believing that bringing competition into the universal service obligation would mean higher postal rates for customers.

The Post also pointed out that its unique position as provider of universal postal services had been tested in court last year, when challenged by private postal company Janzen.

“Strange”

The row with the FAS comes just a few weeks after Russian Post was fined 6m Rubles (about $220,000 USD) at the end of July, for abusing its dominant position as a monopoly in the mail market.

That case involved the offer of registered mail services for businesses in one Russian area at a discount to registered mail services offered in other Russian areas. The FAS said of the case that Russian Post should have kept to the published registered mail price as approved by the Federal Tariff Service.

Turkish food retail plays catch-up to Russia

http://www.bne.eu/storyf2834/Turkish_food_retail_plays_catchup_to_Russia

Both Russian and Turkish food retailers have strong growth potential, according to a new study released by Renaissance Capital. While the two countries in many ways have similar markets, structural and cultural practices make Russian retailers stronger, but the Turks are catching up.

Russia and Turkey have strong domestic retailers at the forefront of their markets. These are the X5 Retail Group and Magnit in Russia, and Migros and BIM in Turkey. The X5 Retail Group and Migros are higher-end retailers, while Magnit and BIM are considered discount chains. Spending on food is also similar: 34% of household income in Russia and 33% in Turkey.

In both countries, 2010 saw per-capita consumer incomes in the range of $6,500-7,500. Going forward, real disposal incomes are expected to grow at 4-5% per year. Even though consumers are price conscious following the economic crisis, there is a growing demand for modern retailers, fed by an obsession with status. "Consumers in both countries appear to be in good shape and with a low debt burden," Renaissance notes.

However, the differences between the countries put Russia out on top.

Shopping habits

To start with, Russia simply has a larger population, 142m versus 75m in Turkey. The Russian food retail market is valued higher, at $263bn compared with $175bn in Turkey, and is expected to grow faster as well. Russia's population is also more urban, with 74% living in cities compared with 69% in Turkey. The level of car penetration is higher in Russia than in Turkey, with 204 cars per 1,000 compared with 109 in Turkey. "The sheer size of the Russian food retail market and its growth potential is superior to Turkey's, although the latter has neighbouring [Middle Eastern and North African] and ex-Soviet southern countries as potential expansion markets," says Renaissance Capital.

The differences are also cultural: fewer women drive in Turkey, although women do most of the shopping, making it difficult for them to get to modern retailers that might be further away. Instead, Turks enjoy shopping daily at smaller corner shops in their neighbourhoods, an example of traditional retailing. By contrast, in Russia hypermarkets are already popular, and accounted for 32% of modern retail in 2010. In Turkey, hypermarkets account for only 12% and their development is uncertain.

Euromonitor estimates that the share of modern food retail in Turkey is 41%. Renaissance Capital forecasts this figure to reach 50% in 2015. "Traditional retail in Turkey is and will remain popular due to tradition and cultural preferences. The share of traditional retail in Turkey is unlikely to subside much lower than the current 53%."

Catch-up

Even if the Russian market is ahead in terms of modern retail, Turkey is expected to catch up in the coming years (though its smaller population will make it unable to surpass the Russians), as there is a lot of room for growth

The Turkish food retail market is under penetrated, as are many other sectors in the country. There is no sure consolidation by major players in modern retail in Turkey. This gives strong opportunities for organic growth and development for both already established retailers and newcomers. Renaissance Capital predicts that the Turkish food retail market will reach TRY392bn by 2015, driven "by 7.4% per annum increase in per-capita spending on food and 0.9% per annum population growth."