|Thanks for all the excellent posts and very useful news/info, as well as your personal views and opinions.
|Sorry, I missed this as it was so unexpected:
JPMorgan Russian Securities’ board has declared an interim dividend of 6.00 pence per ordinary share for the year ending 31 October. The dividend will be paid on 28 October to shareholders on the register at the close of business on 30 September. The ex-dividend date is 29 September.|
|Russian Prime Minister Dmitry Medvedev published an article entitled “New dynamics in Russia’s social and economical development” for the journal Economic Issues, in which he analyzed the current economic politics of Russia.
In the coming years the Russian economy will undergo “a far-reaching renewal,” provoked by the world’s “challenges and changes,” Medvedev wrote.
“We will have to establish a new form of development that is able to provide our country an important place in the modern world. It is not a trivial task however Russia deals with it, not at first. In the past the country managed to find solutions for global challenges. There are no grounds for assuming that the situation will be different,” the prime minister noted.
The head of the government outlined five key directions for social and economical development: optimization of the budgetary policy, structural policy (including import substitution), improving the investment and business environment, improving the quality of the state itself and development of the social sphere.
The article stresses that Russia will continue “to move steadily towards foreign economic openness.” It will be implemented through the establishment of free trade areas with individual groups of countries and also through preferential trade agreements.
Medvedev also promised that, on the basis of the 2016 results, inflation will not exceed 6%.
“Timely decisions to switch over to the inflation targeting regime allow savings of gold and foreign currency reserves, and ensure the sustainability of the monetary system. Inflation has been decreasing constantly and, on the basis of the 2016 results, will not exceed 6%. And the target indicator of 4%, which recently seemed fantastic, is now taking real shape,” the article reads.
In September 2009, Medvedev published an article about the economy entitled “Go Russia!” in which he invited cooperation from those who were against his course and also from those who support his policy.
“Should we continue sticking to the primitive economy based on natural resources, chronic corruption, a long standing habit to rely on the state to address problems, on foreign countries, on some ‘all powerful doctrine,’ on anything, anyone, except ourselves? Does Russia have its own tomorrow overloaded by such burdens?” he wrote.|
|Russia’s economy seems to be finally emerging from recession:
Bright August. Rosstat data showed that industrial production returned to positive territory (0.7% YoY growth) in August driven by the improvement in manufacturing, which grew 0.1% YoY after the 1.5% YoY contraction in July. Construction dynamics continued to improve (2% YoY contraction in August after a 3.5% YoY drop a month earlier) due to the gradual recovery in capital investment. Growth in transportation accelerated driven by the improvement in industry and construction. In addition, after a two-month pause the services sector returned to growth. Agriculture continued to accelerate (6% YoY growth from 4.9% YoY in July) supported by a bumper harvest. Unemployment continued to decline due to seasonal factors and reached 5.2% of the economically active population. As a result, we estimate that real GDP declined 0.5% YoY in August.|
|Russia’s UTair Aviation which is Russia´s 4th biggest airline will launch a 3X-weekly Saint Petersburg-Munich Boeing 737 service Oct. 30, its first scheduled international flight from St. Petersburg in the 2016-17 winter season.
According to a Pulkovo statement, in addition to Munich, several new destinations will be added. Belgrade-based Air Serbia will continue Belgrade-Saint Petersburg service that was launched in the 2016 summer season. Russia’s RusLine Airline will extend its Saint Petersburg-Oslo service for the winter schedule.|
|JRS share price will keep rising as the pound is steadily falling against the rouble.
18 months ago the exchange rate was 120 roubles to the pound, over the past few days it has fallen to below 80 roubles to the pound.
I´ve been reading this time next year or well before the exchange rate could easily reach 70 roubles to the pound which will add a further 40p to the price per JRS share.
I´m astonished to see the discount to Nav is -18.37% compared to JMC (China) -16.43%, JII (India) -14.46% and JPB (Brazil) -12.6% which in my opinion are all very high discount to Nav´s.|
|On Friday, Sberbank (JRS Largest Investment) released September RAS figures. Net income rose 13% MoM to a new monthly record of RUB54 bln, with ROAE at a post-2012 high of 24% (vs 20-22% during the past 6 months). NIM rose 10 bps MoM to 6.2%, meaning a relatively resilient level for the last four months; net interest income was flat MoM but rose 5% QoQ. September also saw support from a strong trading gain, despite the stronger ruble.|
|The American´s really seem to dislike Russia.
WASHINGTON — The United States does not rule out imposing sanctions on Russia over the current situation in Syria outside the United Nations (UN) auspices, White House spokesman Josh Earnest told reporters on Thursday.
Earnest continued, “We’ve done that in the past, and I wouldn’t take it off the table in terms of the options the president may consider in the situation.”
The White House spokesman noted that there have been other cases when the United States acted outside the UN.
The spokesperson added that the current anti-Russia sanctions over the Ukrainian conflict have not achieved the desired effect despite having some impact on the country.|
|The Russian economy is headed in the right direction as it started to recover from the shocks of lower oil prices and Western sanctions, International Monetary Fund (IMF) Deputy Director of Research Gian Maria Milesi-Ferretti told a news conference on Tuesday.
"Domestic demand is gradually recovering. Monetary policy has started an easing cycle, and…we see the Russian economy moving clearly in the right direction," Milesi-Ferretti told reporters.
"The exchange rate has played a crucial role in acting as a stabilizing device," Milesi-Ferretti explained.
He said the big depreciation of the Russian ruble exchange rate allowed containing the fiscal impact of the declining oil prices.
"It has limited the decline in oil revenues when measured in rubles," the economist said.
Milesi-Ferretti noted that ruble’s depreciation was hard for domestic demand, since real incomes declined.
Earlier on Tuesday, the IMF released its Global Economic Outlook that had revised Russia’s growth upward. Russia’s GDP will contract 0.8 percent in 2016 and grow at 1.1 percent in 2017, according to the Fund.|
|I didn´t know this:
The USA is the ONLY country that has the power to veto any decision made by the International Monetary Fund (the IMF).
In 2017, due to a change in the way voting power is calculated in the IMF, the BRICS counties will also be able to veto decisions, meaning the US no longer has exclusive control...
To make sure it can get policy through, the US will be forced to bargain with the BRICS.
Most significantly, this means the US will have to offer compromises to Russia...
So not only is there pressure from some European countries to lift sanctions, the changing balance of power in the IMF could mean the US have to volunteer a compromise itself.|
|On a personal note: much of Russia´s GDP growth next year will be real growth (agricultural and manufacturing) while most of the UK´s is basically more comsumer spending and house building.
Even with the progress made in Russia their yield per acre of agricultural land is still 1/2 of that of the UK and often even 1/3rd so there is still a great deal of growth potential in the yield.|
|Russia’s PMI manufacturing reached 51.1 in September, a 0.3 ppt improvement MoM, Markit reported yesterday. The index is above 50 for a second month and gives hope that the weakness in the economy is bottoming out.
(I´ve noticed over the past year all the new trams and metro trains in St Petersburg are being bought from local Russian companies rather than from EU companies.)
On the Global Competitiveness Index Russia is up to 43rd place out of 138 countries as a result of strengthened fundamentals, such as the quality and quantity of education and innovation capacity, as well as improved domestic business environment.
The oil price rallied to one-month high after OPEC announced last week a decision to sign an agreement on production limits at the next OPEC meeting in November. Today the prices remain strong, with Brent futures well above $50/bbl.|
|RUSSIA: Moscow-based Metrogiprotrans has won two contracts for preliminary design work for extensions of the St Petersburg metro.
A 140m rouble contract covers the first phase of the circular Line 7. This would serve stations at Bolshoy Prospekt-2 (interchange with Line 4), Vasileostrovskaya-2 (interchange with Line 3), Sportivnaya-2 (interchange with Line 5), Petrogradskaya-2 (interchange with Line 2), Kantemirovskaya and Lesnaya-2 (interchange with Line 1). Metrogiprotrans beat bids from Lenmetrogiprotrans and RusGidro.
A separate 47·5m rouble contract covers the southern extension of Line 1 from Prospekt Veteranov to Pulkovo Airport with an intermediate station at Ulyanka.
Metrogiprotrans is currently engaged in preliminary planning for the northern extension of Line 6.|
|Russia plans to stock up on about 200 tons of gold this year, nearly matching the 208 tons it purchased in 2015. That's according to Anton Navoi, the deputy head of the statistics department at the Russian Central Bank. Navoi explained that it's profitable for the state to buy the precious metal, since Russia is a world leader in its production.
Speaking at a conference on Wednesday, the official said that "last year, the Central Bank purchased 208 tons of gold. This year, it will purchase around 200 tons." Gold currently accounts for around 16 percent of the country's foreign exchange reserves, Navoi noted. And while there is no directed effort to increase the precious metal's share in Russia's reserves, it seems likely to happen, as the purchase of gold is profitable for the country.
"The Central Bank is buying gold because it is profitable. We are a country that is third in the world in terms of gold production, and we have the ability to buy it using our national currency, in contrast to other countries, which do not have such an opportunity," the banker concluded.
At the beginning of the year, the Russian Central Bank purchased 3.6 million ounces (112 tons) of gold. As of September 1, Russia's gold reserves totaled 49.1 million ounces (1,527.2 tons), valued at an estimated $64.71 billion US.
Russia has steadily built up its gold reserves over the last decade. In 2007, reserves totaled 402 tons. By 2012 they more than doubled to 883.2 tons; now, by the end of this year, the total looks set on nearly doubling again, this time to over 1,600 tons.
With analysts predicting that global gold prices will continue to rise (prices have already spiked nearly 20% since January), Chinese investors are actively looking to increase their investment in Russian gold production.
According to Rosgeo, Russia's state-owned geological exploration company, Russia may beat out Australia to become the world's second gold producer (next to China), by 2030. Producing 247 tons in 2014, Russia could produce up to 400 tons of the material in a decade and a half.
In addition to its use to produce jewelry, electronics, and aerospace equipment, gold has become an attractive investment option for the Russian and Chinese Central Banks, in part due to its high yield compared to US Treasury bonds.|
|Europe & Russia will eventually have common economic space:
The Russian envoy to the European Union has said he believes that the current sanctions employed by both sides would give way to long-term cooperation within a common economic space.
“I’m an optimist and I think that the current rhetoric of the EU will pass, as will the sanctions – they cannot last forever. The common economic space, on the other hand, is a serious long-term project,” Vladimir Chizhov said-
Chizhov also welcomed the proposal to start work on a common economic bloc “from Lisbon to Vladivostok” recently voiced by French ambassador to Russia Jean-Maurice Ripert, albeit noting that this was not the first time such an initiative had been brought up by both Russian and European officials.
He also noted that in the long term the project could encompass not only the EU and Russia, but the EU and the Eurasian Economic Union – the bloc that also includes Belarus, Armenia, Kazakhstan and Kyrgyzstan.
“It will be the binding of all integration processes and structures that had been created lately that can give our European continent, or, we can also call it the Eurasian continent, the confidence in the changing multi-polar world,” Chizhov said.
“I would like to emphasize one thing, to avoid misunderstanding – the issue of sanctions currently is not on the bilateral agenda. This is a unilateral problem, created by the European Union and it should be solved by the European Union. When our partners find enough political will to get out of the dead end that they have led themselves into, they know where to find us,” the Russian diplomat stated.
“It’s true that we have introduced reciprocal measures – an entry ban on certain persons and certain trade restrictions – but we said it back then and we are ready to repeat this – Russian sanctions are a reply measure and they will be lifted as soon as the European Union lifts its initial restrictions,” he added.
The sanctions exchange began in mid-2014 as the US, EU and a number of their allies introduced sanctions against Russian companies and politicians over Russia’s alleged role in the Ukrainian conflict and the accession of the Crimean Republic into the Russian Federation.
In August 2014, the Russian government reciprocated with a ban on the import on meat, poultry, fish, cheese, milk, fruit and vegetables from the US, EU, Australia, Canada, Norway and other countries that had joined the initial Western sanctions. The embargo has been prolonged several times , most recently until December 31, 2017, due to the unwillingness of the West to lift restrictions on Russia.
However, in mid-June this year President Vladimir Putin told the participants of a major economic forum that Russia could lift the sanctions it has imposed on the EU, once it’s certain that similar steps would follow from the union.|
|Amid a record-setting harvest, Russia's agricultural sector is giving the Russian economy a powerful and much-needed boost; according to some observers, the sector even has the potential to gradually wean the country off its dependence on the export of hydrocarbons.
This year, the country is expected to produce about 64 million metric tons of wheat, with the total grain harvest expected to reach between 113 and 116 million tons. This would mean exceeding contemporary Russia's previous record – set in 2008 when farmers produced 108.2 million tons of grain. About 40 million tons from this year's harvest is expected to be exported, up from the 32 million tons exported last year.
Amid the bumper crop bonanza, which is becoming a regular occurrence as the Russian agro-industrial complex takes advantage of sanctions on European food products, some officials are beginning to suggest that agriculture may soon turn into a major tool helping to ease the country's dependence on oil and gas exports as a percentage of its exports earnings.
Earlier this month, analysts calculated that Russia's agriculture had already surpassed arms trade as a percentage of the country's exports. Moreover, Minister of Agriculture Alexander Tkachev anticipated that by 2030, the grain harvest could reach 130 million tons annually.
Speaking to the independent online newspaper Svobodnaya Pressa, Elena Turina, general director of the Moscow-based Institute of Agricultural Marketing, emphasized that grain exports are just the beginning.
"We have become a world leader in grain exports; furthermore, we are coming close to a level where we can take up a leading position as a major exporter of pork and poultry, and after that – of field vegetables. If we put in the necessary effort, we can achieve good results in the export of dairy products as well. In fact, we already have a good export potential, and not just in food products of all sorts, but in feedstock as well."
According to the expert, Russian agriculture's "main resource is farmland itself, which, unfortunately still isn't being used to its fullest potential. A great deal of hope has been placed in the new technologies now being introduced, which will generate greater profitability for producers, while increasing output as well."
In any case, even if Russia cannot rely on agricultural exports outstripping the earnings brought in by hydrocarbons, at least in the short term it can, at the very least, count on food security.|
|RTS index reaches 1000. Equities rallied across-the-board after the US Fed refrained from a rate raise this time. Russian stocks were among the best performers globally. The RTS Index, supported by the oil price rally and the strong ruble, jumped 2.3% higher closing above the 1,000 benchmark. Financial stocks were the leaders, as the RTS financial institutions index gained 3.1%.|
|strong - dragging up BEE, BEEP too|
|The CBR reduced the key rate by 0.5 ppt to 10% on Friday for the second time this year. The bank said in its press release that the key rate will likely remain untouched for the remainder of the year in order to keep inflation under control, however it may make a further cut in the first or second quarter of 2017. The circumstances for another key rate cut this year would only be “in case of significant deviations from our base case scenario to the better”, the CBR Chair, Elvira Nabiullina, said at the press conference after the decision.
Yesterday Rosstat released the key economic indicators for August. Most indicators improved YoY compared to July. However, retail trade disappointed, as sales dropped 5.1% YoY in August vs. a 5.2% YoY drop in July (initial July estimate was a 5% YoY contraction); the figures fell short of expectations (the Bloomberg and Interfax consensus both forecasted a 4.9% YoY drop). All in all, retail trade contracted 5.7% YoY in 8M16.|
|New Holland: St Petersburg's new cultural district.
St. Petersburg has never had a major recreation area associated with the city such as Gorky Park in Moscow. After three years of reconstruction locals now have their own fortified island dedicated to the pursuit of fun, art and outdoor activities. New Holland was built at approximately the same time as the city itself at the beginning of the 18th century.
Initially the island belonged to the Admiralty, a shipbuilding yard established by Peter I in 1704. During the first few years of operation, the yard resembled a real Dutch dockyard, so it was nicknamed New Holland due to the presence of foreign shipbuilders and manmade canals.
A 20-minute walk east along the river Neva from the Hermitage museum, in the centre of St Petersburg, there’s a 19-acre triangular islet known as Novaya Gollandiya, literally New Holland, bordered by the Moika river and the Kryukov and Admiralteisky canals. On August 27, thanks to a €400 million donation from Roman Abramovich’s asset management company Millhouse, it opened to the public as a park – a rarity in this city – and cultural destination.
Long off limits to the general public, the island was originally intended as a lumber store for Peter the Great’s prodigious shipbuilding programme, hence the immense red-brick barracks and warehouses tall enough to store a ship’s mast vertically. Later an imposing doughnut-shaped naval prison, known as the Bottle for its resemblance to a bottleneck, was built in the southern corner of the site. It is due to open in January, filled with restaurants and shops, notably a branch of the excellent Garage Bookshop (which sells a whole lot more than books), as well as ballet, yoga and cycling studios (because you can’t train outside when it’s icy), a spa and a centre where young people can develop various technological and design skills.
There’s also a large basin at the heart of the island, now colonised by waterlilies, where the USSR’s first submarines were developed. It was also here that Dmitry Mendeleev developed smokeless gunpowder; and Lenin first broadcast the news that the revolution had begun.
The park has imported 200 mature oaks, willows and sufficient limes to plant an avenue along the edge of the Admiralteysky Canal, and a giant spruce that will be decorated every Christmas.
There will still be outdoor sculpture, the island features a wooden playground for children in the form of a historic frigate called Peter and Paul, two petanque courts, a couple of food kiosks “for rotating pop-up projects from young restaurateurs”, a stage for live performances and temporary pavilions designed by local architects for art exhibitions. There will also be a huge herb garden in front of the former foundry, one of the oldest buildings on the site, which in November will open as a restaurant, club and space for screenings and lectures.
As winter creeps in, the lawn will be turned into a skating rink and the Christmas holidays will usher in spectacular light displays and real fir trees decorated by local volunteers.
The park is an invaluable addition to the city, both as bosky open space, an extra “green lung” and somewhere to enjoy the last rays of sun.
The closest subway station is Admiralteyskaya (1.9 kilometers or a little over a mile) and the next closest is Sennaya Ploshchad (2.4 kilometers or about 1.5 miles). The best view of New Holland can be enjoyed from the Moika Embankment.
Another way to get to the park is via St. Isaac's Cathedral. From there take Konnogvardeysky Boulevard, which then becomes the Admiralty Canal.|
|LG Electronics of South Korea has high hopes for a quick market recovery, saying Russia has market potential with a strong consumer base in the high-end and mid-income sectors.
“The economy is not as good as it was before, but it won’t take long for a full recovery. We should prepare for that,” Song Dae-hyun, executive vice president and CEO of LG Electronics’ Russia operation told reporters visiting its factory in Ruza, 86 kilometers west of Moscow, Monday.|
|Budget deficit decreased to 2.9% of GDP in 8M16. Yesterday, the Finance Ministry released budget statistics for 8M16: the federal budget deficit was at RUB1.52 tln, or 2.9% of GDP. For 7M16, the Ministry reported previously a budget deficit of RUB1.52 tln, or 3.3% of GDP.
Basically means for last month Russia was budget neutral if the actual amount of deficit in Rouble terms was the same as the month before.
Going in the right direction. I wish the UK had a similar budget deficit. I think Russia is doing very well considering three years ago as Russia was basing this years budget on an oil price of over $100 per bbl.
I think next year Russia is basing their budget on an average oil price of $55 per bbl and expecting a budget deficit of just 1.5%.|
|Speaking at a meeting with President Vladimir Putin, Nikolay Tokarev, the CEO of Transneft, said that the export of Russian oil products currently exported through terminals in the Baltic states will be handled at Russian ports and all export volumes will be handled at Russian marine terminals by 2018.
This is excellent news for St Petersburg, but terrible news for the Balitc states losing so much revenue.|
|loganair thank you for all your informative posts I have modest holdings in family portfolios. The substantial discount to improving performance of top Russian assets I think is still attractive.
|Magnit (JRS 2nd Largest Investment) on Friday reported its trading update for August. Revenue increased 13.8% YoY to RUB90.1 bln ($1.4 bln). The convenience store segment, the company’s main business unit, demonstrated similar growth rate of 14.2% (vs. 13.8% YoY in July) to RUB 66.5 ($1.0 bln), while sales at the hypermarket division dropped again, contracting 2.9% YoY (vs a 1.9% decline YoY in July) to RUB12.9 bln ($199 mln). The Magnit family segment saw sales rise 29.0% YoY (33.2.9% YoY in July) to RUB4.8 bln ($74 mln), while sales at the drogerie segment rose 52% YoY (vs. 53% YoY in July) to RUB5.9 bln ($90 mln).
Russia seems to be having similar problems to hear in the UK where the larger sized supermarkets are struggling while convenience stores are growing at a very good rate.|