Russia 111206 Basic Political Developments
National Economic Trends Acting min: Russia’s 2011 budget surplus may exceed 0.5% of GDP
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- Ruble slumps in MICEX trade on SP warning of eurozone downgrade
- Fitch confirms Russia’s BBB rating
- Poll results will not affect Russias rating - Fitch
- Business, Energy or Environmental regulations or discussions
National Economic TrendsActing min: Russia’s 2011 budget surplus may exceed 0.5% of GDPhttp://www.prime-tass.com/news/_Acting_min_Russias_2011_budget_surplus_may_exceed_05_of_GDP/0/%7B63DBB176-FCD5-4300-953C-D74ACD9F44C9%7D.uif MOSCOW, Dec 6 (PRIME) -- Russia’s Finance Ministry believes that the country’s federal budget surplus may exceed 0.5% of the gross domestic product (GDP) in 2011, acting Finance Minister Anton Siluanov said at a briefing late Monday, RIA Novosti reported. “According to our estimate, the (federal budget) surplus is to amount to 0.5% of GDP, though we’d hoped that it would be even more than that,” Siluanov said. Siluanov added that in January–September, federal budget incomes were at 8.213 trillion rubles, while budget expenses were at 7.082 trillion rubles. The federal budget surplus in January–September amounted to 1.131 trillion rubles, or 3% of GDP. Siluanov attributed the federal budget surplus received in January–September primarily to a favorable foreign economic situation and higher oil prices than planned. Consequently, Russia received 2.400 trillion rubles in additional income. Of the total, 340 billion rubles are to be spent in 2011 with the remaining transferred to the Reserve Fund, which is to be increased to 1.800 trillion rubles in 2011. The assets accumulated in the Reserve Fund would ensure the fulfillment of the country’s 2012 budget obligations, even under a worsened economic situation. In late November, Siluanov said that Russia’s federal budget surplus is to amount to 0.5% of GDP. The Finance Ministry had earlier revised its forecast for the federal budget surplus to 0.3%–0.4% of GDP in 2011, up from the previously estimated 0.3%. In 2010, Russia’s federal budget deficit amounted to 3.9% of the country’s GDP. (30.9068 rubles – U.S. $1) End 06.12.2011 11:47 Ruble slumps in MICEX trade on S&P warning of eurozone downgradehttp://en.ria.ru/business/20111206/169394215.html 12:15 06/12/2011 MOSCOW, December 6 (RIA Novosti)The Russian ruble slumped in MICEX trade and Russian stocks were lower on Tuesday in the wake of S&P’s decision to put six leading eurozone economies on the list for possible downgrade. As of 11:24 a.m. Moscow time (08:24 a.m. GMT), the ruble had fallen by 19 kopeks against the U.S. dollar to 31.0995 and by 0.5 kopecks against the single European currency to 41.5918. The value of the bi-currency basket, comprising $0.55 and 0.45 euros, rose by 13 kopecks to 35.83 rubles compared with Monday’s close. The dollar-denominated RTS stock exchange lost 1.48 percent to 1,536.14, while the ruble-denominated MICEX fell 0.9 percent to 1,504.18. International Brent oil prices are hovering at $109.2 per barrel, showing a decrease of 0.6 percent on yesterday’s close. International ratings agency Standard & Poor's announced late on Monday it had put six leading eurozone economies with the highest AAA rating, including Germany and France, on the list for possible downgrade. A total of 15 out of 17 eurozone economies were put on the "CreditWatch" list, which means that there is 50 percent possibility that their ratings will be downgraded within 90 days, S&P said. "Systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole," S&P said on its website. "We now assign a 40 percent probability of a fall in output for the eurozone as a whole," the statement said. The rating of six eurozone economies with the highest AAA rating - Austria, Finland, France, Germany, Luxembourg and The Netherlands - may be downgraded by one notch and by up to two notches for the other governments. The eurozone sovereign ratings may be reviewed "as soon as possible" in the wake of the EU summit to take place on December 8-9. Finance Ministry projects higher capital outflow http://www.rbcnews.com/free/20111206103912.shtml RBC, 06.12.2011, Moscow 10:39:12.Net capital outflow from Russia could exceed $85bn in 2011, acting Finance Minister Anton Siluanov told reporters. "The global economy is slowing down, so the capital outflow will be substantial and could come in, according to our estimates, at $80bn or even top $85bn," he said, adding that such results would have a negative impact on Russia's economy. Earlier, the Central Bank of Russia had announced that capital outflow stood at $64bn in 10M 2011. Despite the upsurge in capital outflow, Russia's GDP edged up 4.3% in January-September 2011, up from the projected 4.1% growth rate, Siluanov went on to say. By the end of 2011, the GDP growth rate could reach 4.5%, he noted.
The international rating agency Fitch Ratings has confirmed Russia’s BBB rating. According to a statement on Tuesday, the agency forecasts Russia’s positive outlook at BBB. The current rating was awarded to this country in September and Fitch experts believe Russia will stay its present economic course. (RBC)
http://en.rian.ru/business/20111206/169393319.html 11:51 06/12/2011 MOSCOW, December 6 (RIA Novosti) – The results of Russia’s parliamentary elections, in which the ruling United Russia party fared worse than expected, will not affect the country's investment-grade rating, international rating agency Fitch said. "The results will not alter our ‘BBB’ rating and positive outlook on the Russian Federation, which Fitch affirmed in September. Russia’s vulnerability to a severe and sustained fall in oil prices and its economic and fiscal performance remain the key possible ratings triggers, as they were in September," the rating agency said in a statement. Prime Minister Vladimir Putin's party saw a big slump in support at Sunday's polls, with its share of the vote falling from 64% to just under 50%. Business, Energy or Environmental regulations or discussionsRTS Futures Fall on Europe as Mechel Advances: Russia Overnighthttp://www.businessweek.com/news/2011-12-05/rts-futures-fall-on-europe-as-mechel-advances-russia-overnight.html December 05, 2011, 11:12 PM EST By Leon Lazaroff and Halia Pavliva Dec. 6 (Bloomberg) -- Russian stock futures declined as oil gave up its advance after Standard & Poor’s said Germany and France may be stripped of their AAA credit ratings. Futures expiring in December on the dollar-denominated RTS index lost 0.7 percent to 154,680 during U.S. trading hours. The Bloomberg Russia-US 14 Index of Russian companies traded in New York added 1.5 percent to 101.39, led by OAO Mechel, Russia’s largest coal producer for steelmakers, after iron ore prices increased. Crude futures in New York dropped as much as 0.6 percent in after-hours trading today after S&P said it would change the rating outlook for 15 euro nations, including the two largest. Russia, the world’s biggest energy exporter, counts Europe as its top trading partner and the largest market for state-run OAO Gazprom. Companies in the Moscow-based Micex index trade at an average 5.3 times analysts’ profit estimates, the lowest valuation among 21 major emerging markets tracked by Bloomberg. “Investors collectively remain skeptical about how fixable the problems are in Europe,” said Lewis Kaufman, a Santa Fe, New Mexico-based money manager at Thornburg Investment Management, who oversees the Thornburg Developing World Fund and helps manage $79 billion. “There is relatively good value in a lot of blue-chip Russian stocks but it’s very hard to quantify adverse developments in Europe and what they could mean if things go awry.” Kaufman’s fund owns shares in OAO Sberbank, Russia’s largest lender, and Yandex NV, the operator of Russia’s most popular Internet search engine. Brent, Urals Drop Crude for January delivery on the New York Mercantile Exchange lost 0.5 percent to $100.47 a barrel as of 11:43 a.m. Hong Kong time. Prices are up 9.9 percent this year. Brent oil for January settlement slid 13 cents to $109.81 on the London-based ICE Futures Europe exchange while Urals crude, Russia’s chief export blend, retreated 0.4 percent to $110.19. Oil and natural gas contribute about 17 percent of Russia’s gross domestic product. Germany, France, the Netherlands, Austria, Finland and Luxembourg, the euro area’s six AAA rated countries, are among the nations being placed on “CreditWatch negative,” pending the result of a summit of European Union leaders on Dec. 9, S&P said. S&P’s downgrade warnings come as German Chancellor Angela Merkel and French President Nicolas Sarkozy push for a rewrite of EU cooperation rules that would institute automatic penalties for deficit violators while locking limits on debt into euro states’ constitutions. Rusal Declines The Hong Kong-listed shares of United Co. Rusal, the world’s largest aluminum producer, sank 3 percent to HK$5.52. The MSCI Asia Pacific Index slumped 1.3 percent, the most since Nov. 23. The RTS Volatility Index, which measures expected swings in the index futures, rose for a second day yesterday, gaining 1.2 percent to 46.08 points. The Market Vectors Russia ETF, a U.S.- traded fund that holds Russian shares, advanced for the first time in three days, adding 1.8 percent to $30.85. Standard & Poor’s GSCI index of 24 raw materials fell 0.1 percent to 657.52 while copper futures rose to a four-week high. Copper for March delivery climbed 0.9 percent to close at $3.6155 a pound on the Comex in New York. The Micex has lost 10 percent in 2011, which compares with a 15 percent slide for Brazil’s Bovespa index, which trades at 10.6 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 11.1 times estimated earnings, and the BSE India Sensitive Index has a ratio of 14.4. The Micex, which climbed to a one-month high in Moscow yesterday, is beating all emerging-markets benchmark measures this quarter for indexes in Thailand, Brazil and Hungary, with an increase of 11.1 percent since Sept. 30. Putin Setback Russian Premier Vladimir Putin’s United Russia party suffered its first election setback in a Dec. 4 parliamentary vote, winning 49.5 percent compared with 64.3 percent four years ago. Putin, who is seeking to switch jobs next year with President Dmitry Medvedev by running for president, may have to contend with a more fractured legislature than when he was president between 2000 and 2008. “The results remove uncertainty as to what the government will look like, and allows investors to recognize that for the first time in 15 years, Russian companies are paying shareholders to be shareholders,” said Roland Nash, chief investment strategist at Moscow-based hedge fund Verno Capital, which manages more than $150 million in Russia. Russian companies including Moscow-based Gazprom are increasing dividends to attract investors while OAO GMK Norilsk Nickel has bought back shares, signs that Russia’s companies are responding to international money managers’ demands to improve corporate governance, Nash said. VimpelCom VimpelCom Ltd., the Russian mobile-phone operator with more than 200 million subscribers worldwide, rose 2.3 percent to $11.81 in New York after UralSib Financial Corp. reiterated its “buy” recommendation on the stock. “Investors have an opportunity to enter VimpelCom at fundamentally attractive levels,” UralSib analysts, including Konstantin Chernyshev, Konstantin Belov and Nikolay Dyachkov said in the report. “Growth in both mobile and fixed-line broadband is set to become the company’s key growth driver in established markets. We expect 8 percent per annum average organic sales growth in 2012 and 2013.” VimpelCom said Jon Fredrik Baksaas, president and chief executive officer of Telenor Group, will replace Jan Edvard Thygesen on its supervisory board, according to a statement filed yesterday. Mechel’s American depositary receipts advanced 5.6 percent to $11.74 after shares in Moscow gained 3.5 percent 354.90 rubles, or the equivalent of $11.49. One ADR represents one ordinary share. Yandex, CTC Yandex NV increased 0.6 percent to close at $21.48 in New York after UralSib raised its recommendation on the stock to “buy” from “hold,” the bank said in an e-mailed report yesterday. “Yandex has good exposure to the rapidly growing Russian online advertising market, which we expect to expand,” UralSib analysts said in the report. “Russia is the only country in Europe where Google lags the local player in search. Yandex should be the main beneficiary from internet penetration growth in the regions.” CTC Media Inc., the Russian television network listed in the U.S., gained 1 percent to $10.06 in New York after UlraSib maintained its “buy” rating on the stock. --With assistance from Darren Boey in Hong Kong. Editors: Marie- France Han, Laura Zelenko To contact the reporters on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net; Halia Pavliva in New York at hpavliva@bloomberg.net To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net December 06, 2011 09:06 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 289.68 Kb. Share with your friends:
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