Jpmorgan Russian Securit... Share Discussion Threads

[loganair] 04/2/2021 14:37

1. Putin doesn't care about the sanctions.

2. China and Europe need and therefore will keep buying Russian gas no matter what.

3. The world needs and will keep buying the grains Russia exports no matter what otherwise many countries will starve.

[johnyo] 04/2/2021 12:12

Ioganair Do you think the Navalny protests will continue or just fizzle out ?With Biden in Power I would think some more sanctions comingMaybe from the EU as well

[loganair] 12/1/2021 14:14

The gold share of Russia’s foreign exchange holdings rose to 22.9 percent over the year to June 30, 2020, according to data revealed by the country’s central bank.

At the same time, the share of US dollar shrank to 22.2 percent from 24.2 percent, while the share of the euro dropped to 29.5 percent from 30.6 percent. The bank also decreased its holdings of Chinese yuan to 12.2 percent from 13.2 percent.

The assets have been steadily growing over recent years and have exceeded the half-a-trillion-dollar target set by the regulator. The forex reserves totaled $593.6 billion by the end of last year.

[flying pig] 11/1/2021 14:39

Loganair

Any news or views?

[loganair] 08/1/2021 22:15

Russian stock market hits all-time high as hopes for recovery boost global investment sentiment. The MOEX rose by more than two percent to a new record of 3,462 points on the last trading day of the week.

Russian energy companies enjoyed the largest gains, with shares of nickel and palladium miner Nornickel jumping over five percent to their new maximum price. Rosneft, Novatek, and Gazprom were up over four percent boosted by positive dynamics in global oil prices.

[aurelius5] 23/12/2020 20:01

Thanks for your work here, Loganair. The trust is certainly an interesting proposition. Rising commodity prices should enhance returns and, hopefully, strengthen the Rouble, which, given Russia's trade surplus and low debt to GDP ratio, is already undervalued.

[loganair] 05/12/2020 14:46

Commodities point to a strong recovery by Graham Smith:


Commodity markets though seem to be urging us to look a bit further ahead and with a more optimistic bent. Oil was back close to US$50 per barrel this week, after OPEC and Russia decided on Thursday to increase their combined production by a smaller than anticipated amount from January. That’s quite a way from the US$38 oil was trading at a month ago and a world away from the negative oil prices of April, when demand conditions in Texas went seriously out of kilter.

The implications of rising commodity prices are far reaching. They promise to improve the relative fortunes of commodity producing countries – in particular, emerging markets like Brazil, Russia, South Africa and Indonesia – after a period of losing out to consumption driven economies, notably the US.

[loganair] 01/12/2020 14:24

David Stevenson - I also think that Russia could be a relative star in 2021 (though I also thought that in 2020, wrongly) largely because its government has more financial firepower to spur growth, especially if energy prices start to tick up. Yields of more than 5% are worth grabbing too. JPMorgan Russian Securities (LSE: JRS) may thus be worth a look.

[loganair] 26/11/2020 21:13

hs - It seems to me most Private Retail Investors are too fearful about investing in Russia whereas for me, investing in Russian stocks, not just JRS, other Russian stocks quoted on the LSE have been one of my best investments over the past 20 years with the icing on the cake being a very good dividend yield on my original investment in JRS.

[hindsight] 26/11/2020 19:01

You seem all alone here Loganair, I tend to like lonely BB stocks

[loganair] 30/10/2020 16:33

While the global economy is trying to stay afloat amid the Covid-19 pandemic, investors should look to emerging markets like Russia and India, as well as at physical gold. That’s the advice from veteran investor Mark Mobius.

Mobius said he sees a lot of opportunities in emerging markets, mainly Russia and India. He added that Brazil, South Africa, South Korea, Taiwan and even Turkey also provide good investments.

“Russia is a very interesting market, many people invest in Russia,” he said, noting positive changes taking place on the country’s market.

The founding partner of Mobius Capital Partners said he is also very bullish on gold and knows many investors with 10-15 percent of their portfolios in physical gold. Gold bullion won’t lose its value with time, like the US dollar did, he said.

According to Mobius, equities are the number one investment asset that protects against devaluation. Commodities are also good.

[loganair] 25/9/2020 15:15

The Board of JPMorgan Russian Securities plc announces that it has declared an interim dividend of 25.00 pence per share, for the year ending 31(st) October 2020, to be paid on 30(th) October 2020 to shareholders on the register at the close of business on 2(nd) October 2020. The ex-dividend date is 1(st) October 2020.

[loganair] 25/9/2020 15:14

In a major strategy shift, Sberbank (JRS 3rd Largest Investment), the most popular Russian lender, wants to build its own ecosystem going far beyond the world of finance and to be known not just as a bank, but also as a tech company.

During its first major online event, which was held on Thursday, Sberbank – now rebranded as Sber – presented a range of services and gadgets signaling it wants to go deeper into the tech sector. For example, the bank presented a family of “emotionalR21; virtual assistants, called ‘Salute’, which will be incorporated into all of Sberbank’s devices and mobile apps.

“We are the first and the only bank in the world which started to produce a smart device,” Sberbank CEO Herman Gref said. He noted that in order to become a company that can develop tech products, it had to go through a massive “transformation” that took five years.

There are three assistants in the Salute family, called Sber, Joy, and Athena. Unlike Apple’s Siri or Amazon’s Alexa, the company is betting on the “emotionalR21; features of the virtual assistants, as each has its own “temper,”; allowing users to choose the one they find most suitable.

In addition to a logo change and new financial service features, like SberPay (an alternative to ApplePay and GooglePay), Sber also presented a TV streaming box called SberBox and a smart speaker called SberPortal. Both devices give access to a wide range of Sber services, while SberPortal, featuring gesture and voice recognition, will allow users to control other devices in the house.

In another step towards joining the Big Tech pantheon, Sber also launched a SmartMarket platform. The service is somewhat similar to App Store and Google Play, and will allow additional features for virtual assistants to enable businesses and entrepreneurs to produce their own apps. Russian airline S7 already has access to the platform and announced that it will create its own app on it.

The lender wants to boost revenues from the fast-growing non-financial sector by 20 to 30 percent, according to officials. This year, these services are expected to bring the bank around 70 billion rubles ($911 million), accounting for around five percent of all its operational revenues.

[loganair] 06/9/2020 09:24

China, Russia Deepen Ties Amid Pandemic, Conflicts With West – Analysis:


Building Ties:

While the pandemic has made China an even more vital economic lifetime and market for Russia, Moscow has become a more needed partner for Beijing as it collides with U.S. President Donald Trump’s administration over a wide range of issues: from a trade war to problems involving Hong Kong and rights in the South China Sea.

This new dynamic offers a turnaround of the forces that drove Beijing and Moscow together following the Kremlin’s annexation of Crimea in 2014, where Russia was placed in the crosshairs of Western sanctions.

During that period, it was Russia that leaned on a sometimes reluctant China to deepen relations to escape U.S. pressure.

Now — as their ties have extended into areas such as military, technology, and finance — those roles are shifting.

“Before Trump, China was cautious to embrace Moscow geopolitically to the fullest extent, but Beijing has determined that U.S. pressure won’t let up, so they have no choice but to move closer to Russia,” said Lukin. “Today, it is China, not Russia, that is more interested in forming this quasi-alliance.̶1;

Russia-China collaboration took off in 2014 after the forcible annexation of Crimea and the ensuing war in eastern Ukraine and has since grown into a variety of domains. One such area of late has been efforts to limit reliance on the U.S. dollar, a process called de-dollarization.

The U.S. dollar holds a powerful place in the global financial system as the world’s reserve currency and de-dollarization has become a priority for both China and Russia to protect their bottom line and push back against American dominance. Replacing the dollar in trade settlements became a necessity to circumvent U.S. sanctions against Russia and efforts have gained speed following Washington’s imposition of tariffs on Chinese goods.

Experts have long warned about efforts to limit the dollar’s privileged role in the world, and though such attempts have not had much success, Beijing and Moscow have made some progress recently.

New data from the Bank of Russia shows that in the first quarter of 2020, the dollar’s share of trade between Russia and China fell below 50 percent for the first time on record, a notable change given that the dollar comprised more than 90 percent of trade in 2014.



Navigating A New Reality:


In the energy sphere, Russia has displaced Saudi Arabia as China’s biggest oil supplier and Gazprom — Russia’s massive gas company — plans to more than triple gas deliveries to China through its new pipelines, amounting to nearly half of current Chinese demand. Russia is also looking to capitalize off of the U.S.- China trade war by increasing its exports of food and minerals at the expense of the United States and other Western nations.

Russia’s political appeal has grown as Beijing finds itself facing new global pressure: Its signature foreign policy project, the Belt and Road Initiative, has suffered setbacks due to concerns in host countries over mounting debts; the pandemic that first appeared in the central Chinese city of Wuhan has hurt Beijing’s credibility; and Western nations have begun to push back against Chinese tech and political policies.

In the face of this pressure, China has moved to hold Russia up as a steadfast partner.

During China’s annual legislative meeting in May, Foreign Minister Wang Yi hailed Russia, saying that it supported Beijing and that both countries would stand “shoulder to shoulder” against U.S. efforts to hold Beijing responsible for the pandemic’s consequences.



An Uncertain Future:

But the growing ties between China and Russia also mask tensions under the surface.

While Moscow is keen to benefit from the financial opportunities opened up in China, it is also wary about becoming too dependent on China, both economically and politically.

“I don’t think you can call this an alliance,” said Maslov. “Right now, Russian and Chinese interests coincide, but there are lots of areas that could create problems and spoil cooperation.”

Projects like the polymer plant in Amur are being heralded by both sides, but past initiatives, such as a water-bottling plant on Lake Baikal and logging projects in the Siberian forests, have faced protests in Russia.

The initial stages of the pandemic were also a source of friction, with Russia shutting down its nearly 4,200-kilometer border with China and Moscow Mayor Sergei Sobyanin enacting a series of controversial policies targeting the Chinese community, leading to a rare rebuke from the Chinese Embassy in Moscow, which complained directly to the Kremlin.

Similarly, Valery Mitko, a 78-year-old retired scientist, was detained in June on charges of passing Russian submarine-detection technology secrets to China. Mitko denies the charges, but the case highlights the suspicions that still characterize the two countries’ relations.

“The trust in the top leadership — between Putin and [Chinese President Xi Jinping] — is very solid, but when you work your way down, you can see the problems,” said Zhang.

“Overall, things have become more pragmatic and realistic. Neither side expects unconditional support from the other on every issue,” he concluded.
“The model of cooperation has changed this year,” Aleksei Maslov, director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, told RFE/RL. “China feels that its position in the world is not as stable as before. This has led to them changing their mind towards Russia and becoming more cooperative.”

[loganair] 01/8/2020 13:06

The foreign reserves of the CBR in percentage terms as of:

...31 March 2018/30 Jun 2018/30 Sept 2018/31 Dec 2018/31 Mar 2019/31 Dec 2019

Euro..22.2%........32.0%.........22.6%.......31.7%.......30.3%.......30.8%
US$...43.7%........21.9%.........32.1%.......22.7%.......23.6%.......24.5%
Gold..17.2%........16.7%.........16.6%.......18.1%.......18.2%.......19.5%
Yuan...5.0%........14.7%.........14.4%.......14.2%.......14.2%.......12.5%
£......7.9%.........6.3%..........6.5%........6.0%........6.6%........6.5%
Yen....0.0%.........4.5%..........4.2%........4.0%........3.9%........3.5%
Can$...3.0%.........2.9%..........2.7%........2.5%........2.5%........2.2%
A$.....1.0%.........1.0%..........0.9%........0.8%........0.8%........0.7%




International Reserves of the CBR as of 30 June 2020 $568.9bln, up from $518bln one year ago.

International Reserves of the CBR as of 20 September 2019 $532.9bln, up from $462bln one year ago.

International Reserves of the CBR as of 28 June 2019 $517.1bln, up from $455.5bln one year ago.

[loganair] 30/7/2020 10:04

After years of talking about abandoning the US dollar, Russia and China are doing it for real. In the first quarter of 2020, the share of the dollar in trade between the countries fell below 50 percent for the first time.

According to Moscow, the share has dropped to 46%, tumbling from 75% in 2018. The 54% of non-dollar trade is made up of Chinese yuan (17%), the euro (30%), and the Russian ruble (7%).

In January, Russian Foreign Minister Sergey Lavrov explained that Moscow is continuing "its policy aimed at gradual de-dollarization" and is looking to make deals in local currencies, where possible.

Movement away from the dollar can also be seen in Russia's trade with other parts of the world, such as the European Union. Since 2016, trade between Moscow and the bloc has been mainly in Euros, with its current share sitting at 46 percent.

[loganair] 28/7/2020 11:34

Chief Global Strategist for Morgan Stanley:

The biggest winners from Covid are...

Germany will be by far the biggest winner, followed by Taiwan, Russia then Vietnam.


Russia - Putin has made Russia far more self-reliant and therefore Putin has been preparing Russia for deglobalisation.

[loganair] 22/6/2020 14:33

Russian IT firms may enjoy significantly lower income tax and insurance payments, according to a plan laid out by Prime Minister Mikhail Mishustin.

The tax break envisages a nearly twofold reduction of insurance payments – from 14 percent to 7.6 percent – while income tax could be cut to three percent from the current level of 20 percent, Russian business daily Vedomosti said, citing two government officials. Additionally, the prime minister reportedly offered to cancel value-added tax (VAT) on software and IT development ads on foreign digital platforms and provide special subsidies for developers.

The proposed measures, which are believed will be permanent, will likely be announced in the near future, the government sources said.

If approved, the changes in tax law may boost exports of Russian software, strengthen domestic IT firms’ competitiveness, and support local developers. At the same time, the measures may encourage more Russian companies currently registered abroad to come back home.

Earlier this month, Russian President Vladimir Putin held a videoconference with government officials to discuss the development of the IT industry, which has proven its key role in the national economy amid coronavirus-related restrictions. Putin ordered a plan be prepared to stimulate the development of the sector, including solutions for a comprehensive tax overhaul.

[loganair] 22/6/2020 09:57

No quick bounce back: Russia’s real GDP to recover in mid-2022 but ruble to remain strong, Economy Ministry says:


Russia’s Ministry of Economic Development has released a fresh forecast for 2019-2022. The ministry said there will be no V-shaped recovery: after a five percent plunge in 2020, real GDP will only recover starting in mid-2022.

The Ministry of Economic Development predicts a GDP growth of 2.8% in 2021 and three percent in 2022.

The Urals price remains below the base budget price of $42, at which point the Russian budget breaks even. Urals will average $31.1 per barrel this year, rising to $35.4 in 2021. Only in 2022 will it return to the breakeven price of $42.2 when Russia Inc. goes back into profit.

That means the Ministry of Finance will rely on the National Welfare Fund (NWF) to top up budget spending until 2023. Currently there are some nine trillion rubles ($130bn) of liquid assets in the NWF. With an estimated three-trillion-ruble shortfall in budget revenues forecast for this year, there is therefore enough in the NWF to cover at least another three years of deficits.

The ministry also says the ruble will remain relatively strong over the period. The ruble was trading at an average rate of 64.7 rubles to the dollar in 2019 before the start of the oil price shock and the corona crisis, but it sank to a low of 80 rubles amid the panic that followed. It has since recovered to break below 70 rubles again in the first weeks of June.

The Ministry of Economic Development predicts that the FX RUB/$ rate will average 72.6 rubles to the dollar this year. After that the rate will go to 74.7 in 2021 and 73.3 in 2022.

Real incomes will decline 3.5% in 2020 after growing for the first time in six years by an average of 2.9% in 2019. But real wage growth will recover next year, up by 3.1% and two percent in 2021 and 2022 respectively.

At the same time, unemployment will remain at an elevated level of 5.7% this year, up from 4.6% in 2019, before diminishing slowly over the next two years to 5.4% and then 4.9%.

The fall in oil prices will also put pressure on the balance of payments, but those will remain positive throughout. Russia ran a $65 billion trade surplus in 2019 that will fall to a mere nine billion this year, before recovering very slowly to $10 billion and $27 billion over the next two years.

The current account is also expected to halve this year to $45 billion but the Ministry of Economic Development offered no forecast on this number. Opinion is divided amongst analysts on what will happen to the current account. The Central Bank of Russia (CBR) said last month that the current account may go negative for the first time in a decade this year after oil prices fell to around $25; more recently, however, analysts at BCS Global Markets predicted that Russia will earn $45 billion this year, after oil prices recovered surprisingly quickly.

Among the other predictions, the Ministry of Economic Development estimates that inflation at the end of the year will go from three percent in 2019 to four percent this year and stay at that level for the next two years – at the CBR’s target rate.

Amongst the more depressing forecasts is that investment will shrink by 12% this year from the meagre 1.7% growth in 2019, but that it will recover to 4.9% and 5.6% in 2021 and 2022 respectively.

The low level of inflation is the bugbear in Russia’s otherwise strong macro-fundamentals picture. The level of investment is equivalent to 20.6% of GDP in 2019, 20.1% in 2020, 20.7% in 2021 and 21.1% in 2022 – but economists say that investment needs to rise above 25% per year if Russia is to break out of its current cycle of stagnation.

[loganair] 10/6/2020 22:35

Rising oil prices put Russia back in profit:

Oil prices have recovered remarkably fast after the OPEC++ deal was agreed, to break above $40 to the barrel again, back into the Kremlin’s “comfort zone,” according to the Finance Ministry.

Russia Inc is back in profit with $40 oil, which is how much a barrel needs to cost for the budget to break even. In addition, at $42 per barrel Russia will start accumulating money in its reserve fund, the National Welfare Fund (NWF), as under the so-called budget rule, any oil tax revenues earned from oil prices over $42.4 has to be paid into the NWF.


The NWF is there to cover any budget deficit in a crisis, and the Finance Ministry was intending to tap the fund, which held 12 trillion rubles ($174 billion) as of the start of March, to cover an anticipated deficit of 3 trillion rubles this year. The reserves fell to 9 trillion rubles in May after the Ministry of Finance used part of the funds to buy a stake in Sberbank, the biggest bank in Russia, from the CBR – a backdoor route to give the CBR a war chest of cash it could use to defend the ruble if needed – but still leaving at least three years’ worth of cash in the fund to cover a budget deficit.

Still a crisis price to pay:

That is not to say this crisis is not going to be painful and that the government is not going to have to spend heavily to get Russia Inc back to work. Rosstat reported this week that the basic sectors – a good proxy for GDP – were down by 10 percent year-on-year in April and that the consumer-orientated sectors are all down by at least a third.

Last week Prime Minister Mikhail Mishustin unveiled the latest version of the National Plan for Economic Recovery (NPER), which calls for some 5 trillion rubles ($72.8 billion) of spending, or 7.8 percent of GDP. However, much of this money is simply funds that were already committed under the current budget to pay for the 12 national projects and is now going to be re-tasked to stimulate the economy or support the social sector:

The bottom line is the 2 percent of GDP budget surplus will disappear and the government will run a 0.5 percent of GDP deficit, plus the Ministry of Finance intends to borrow an extra 2 trillion rubles ($29 billion) from the domestic bond market on top of the 2 trillion rubles already pencilled into the current budget, to help pay for the NPER. Again, that means the reserves will remain a last line of defence, and if Russia continues its rebound there is a good chance that the Kremlin will end this year with even more cash in reserve than it has now.

Russian rebound underway, safe haven for investors:

The economic rebound in Russia is already visible after the ruble has clawed back much of the ground it lost in the last two months against the dollar. At the same time, if there is a deficit this year the ministry also now has the option of financing it by issuing Russian Ministry of Finance ruble-denominated OFZ treasury bills, which are increasingly seen as a safe haven by international investors thanks to Russia’s rock solid finances. Indeed, over a third of the foreign investors in the OFZ are from the US, where the bonds have proven to be a popular investment with institutional investors like insurance companies and pension funds.

[loganair] 04/6/2020 14:25

Russia ramps up natural gas delivery to China via Power of Siberia mega pipeline:


Agreement on gas supplies via the Power of Siberia pipeline was reached in 2014, with Russia’s energy giant Gazprom (JRS Largest Investment) and the China National Petroleum Corporation (CNPC) inking a 30-year contract. It is Gazprom’s biggest-ever agreement and the first natural gas pipeline between Russia and China.

The Russian company plans to start with deliveries of 10 million cubic meters a day and aims to reach peak capacity by 2025. Gazprom plans to export five billion cubic meters of gas to China this year, 10 billion in 2021 and 15 billion in 2022.

Gas consumption in China, Asia’s biggest economy, has surged in recent years as the government pressures homes and factories to use it instead of coal to combat air pollution. Gazprom intends to become China’s biggest supplier, making up more than 25 percent of gas imports by 2035 as demand for natural gas grows.

[loganair] 25/4/2020 08:34

The Bank of Russia slashed its interest rate by 50 basis points on Friday, for the first time since October 2019, to 5.5 percent. The regulator said that further reductions may follow soon.

“Since the March Board of Directors meeting, the situation has changed dramatically. Significant restrictive measures have been introduced to combat the coronavirus pandemic, both in Russia and across the world, which negatively influences economic activity,” the central bank said in a statement.

The Bank of Russia added that it has reviewed the baseline forecast scenario and is shifting to an accommodative monetary policy. According to the bank forecast, given the monetary policy stance, annual inflation will reach 3.8-4.8 percent in 2020 and will stabilize around four percent later on. The country’s GDP (gross domestic product) is forecast to decrease by between four and six percent in 2020.

“If the situation develops in line with the baseline forecast, the Bank of Russia holds open the prospect of a further key-rate reduction at its upcoming meetings. In its key-rate decision-making, the Bank of Russia will take into account actual and expected inflation dynamics relative to the target and economic developments over the forecast horizon, as well as risks posed by domestic and external conditions and the reaction of financial markets.”

The Russian economy is, beyond this, expected to follow a recovery path, with growth predicted to total 2.8-4.8 percent in 2021 and 1.5-3.5 percent in 2022. The bank’s baseline scenario assumes an average price of Urals oil blend of $27 per barrel in 2020, with its subsequent rise to $35 and $45 per barrel in 2021 and 2022 respectively.