20 November 2002 06:37
NEWS
*** The Central Bank of Russia has lifted quotas on foreign capital participation in Russia's banking
system.
Central Bank Chairman Sergei Ignatyev signed the pertinent order in accordance with a board decision of October
24.
The order comes into force ten days after publication.
The current quota is 12% of consolidated Russian bank charter
*** In the absence of economic woes, inflation in Russia could in
several years drop to 1-2% a year, thinks Deputy Prime Minister and
The document is contained in Central Bank review No. 62 (640), which was published Wednesday.
is planning to see inflation down from 18.6% to 14%. Further on, we
intend to reduce it to 2-3% a year. If there are no strong economic
capital.
*** The Gazprom board of directors has given the nod to a deal for the
company's acquisition of a share in the charter capital of the
The share of foreign capital in Russian bank charter capital dropped from 5.3% to 5.2% in the first nine months of
2002. *** A new version of the law on currency regulation and control has been submitted to the State Duma, Grigory
Tomchin, the chairman of the Duma economic policy committee, said at a press conference Wednesday. The bill envisages
lifting the mandatory sale of export earnings, he said. The government's conclusion on the bill will be submitted
to the State Duma in the near future. Deputies plan to discuss the document in the first reading in January. However, if
the government submits its version of the bill then the Duma will discuss both drafts in February. *** The Russian
Finance Ministry transferred another payment in the amount of $55.681 million (41.667 million SDR) to the International
Monetary Fund on Wednesday. The payment was made on schedule, the Finance Ministry told Interfax, and is the third and
final one for this month.
Finance Minister Alexei Kudrin. This year, he has said, the government
concerns, it will be 1-2% a year several years from now, Kudrin said, taking question from readers of the weekly
Argumenty I Fakty, which came out on Wednesday. Kudrin added that that inflation level is appropriate for developed
countries like the United States. He noted that not one country has been able to get the better of inflation. ***
According to target, the Tax Ministry should provide the federal budgets with 132.395 billion rubles in November,
including unified social taxes. Tax sources have told Interfax that, not counting the unified social tax, the budget
should receive 105.5 billion rubles, 9.5 billion rubles less than envisioned for October. The unified social tax should
provide the budget with 26.895 billion rubles, a little more than had been planned for October (26.813 billion rubles).
*** Short-term government bond (GKO) yield in September was 11.9% per annum, the rate on bank loans of up to a year
13.4% per annum, the Central Bank reports on its Internet site. GKO yield is as low as it has been since the appearance
in 1993 of domestic loan securities. This past January, averaged for volume and time in circulation, yield on GKO
circulating no more than 90 days was 13.8% per annum, where it was 84.2% in August of 1998. *** The Russian Finance
Ministry has transferred 4.792 billion rubles to redeem GKO series 21160 and also 1.99 billion rubles to pay the coupon
on five series of OFZ, according to an official statement from the ministry's government debt management
department. *** The weighted average price for the additional tranche of OFZ 45001 bonds, with 1,456-day terms, at
Wednesday's auction was 95.349% of face value, which corresponds to yield of 14.61% annually. The Finance Ministry
sold just under 3.977 billion rubles worth of its 6 billion- ruble issue, the Central Bank of Russia reported. Initial
demand totaled 8.007 billion rubles. The cut-off price was set at 95.283% of face value, which corresponds to yield of
14.64%. *** The weighted average price for 168-day GKO 21164 bonds auctioned Wednesday was 94.441% of face value, which
corresponds to yield of 12.79% annually. The Finance Ministry sold 1.773 billion rubles worth of its 5 billion-ruble
issue, the Central Bank of Russia reported. Initial demand totaled 4.386 billion rubles. The cut-off price was set at
94.42% of face value, which corresponds to yield of 12.84%. *** Electricity tariffs on the energy wholesale market
(FOREM) could go up 19-20% next year, Federal Energy Commission Chairman Georgy Kutovoi said Wednesday during
'government hour' at the Duma. Kutovoi said the commission is predicting retail electricity prices to go up
14%. For the consumer market, growth in wholesale prices will only rise 7%, he said. Kutovoi also announced that gas
prices could go up as much as 20%, and that railway tariffs could well be increased by 13.8%. *** The Federal Energy
Commission is proposing a single tariff for the populations of Russia's European part, Siberia and the Far East,
Kutovoi said. The problem of regional tariffs has to be taken by regional energy commissions and governors, he said.
Russia is now experiencing an appreciable diversity of electricity prices in the regions. *** The Russian state has
recovered the possession of the 5% stake in the ALROSA diamond company that used to be held by Garantiya foundation,
Finance Minister Kudrin told the press on Wednesday. "An entry has been made in the shareholders' register
that makes the Property Relations Ministry the holder of 10,000 shares of ALROSA," he said. According to the
Prosecutor General's Office, former Garantiya managers have committed embezzlement, Kudrin said. *** The Russian
stock market's capitalization should before 2005 grow from 400% to 600% to $500 billion, thinks general director at
the Moscow Inter-bank Currency Exchange (MICEX) Alexander Zakharov. Commenting in an interview with Interfax on
Wednesday on proposals the MICEX has sent the government on developing the securities market, Zakharov noted that stock
market capitalization in developed countries comparable to or larger than a country's GDP. Considering this, the
Russian stock market's capitalization should reach $500 billion. If not, the stock market will not be able to
fulfill its task and will remain simply an appendage of the country's economy, he argued. *** In the past two
years, the capitalization of major Russian enterprises has doubled to $106 billion. This is reported in materials
prepared by the Federal Securities Commission for Thursday's government session. Plans call for the issue of
measures for the development of the country's stock market to be discussed at the session. *** Russia will insist
on the right to spend $726 million in export subsidies for agricultural products during its accession talks with the
World Trade Organization (WTO), Russian Grain Union President Arkady Zlochevsky told journalists on Wednesday. This
figure is included in documents that Russia has submitted to the WTO, he said. *** Standard & Poor's Ratings
Services has assigned its 'B+' senior unsecured debt rating to LukInter Finance B.V.'s proposed $350
million five-year guaranteed convertible bonds. As reported earlier, gas major Lukoil (which owns LukInter outright)
placed $300 million in convertible bonds on Tuesday with the option to increase that by $50 million. *** The Federal
Securities Commission on November 15 gave permission to Lukoil to put its stock into circulation outside the country,
the commission's press service reports. *** Standard and Poor's has improved is corporate governance rating
for Northwestern Telecom from '5' to '5.6', the agency has reported. *** International rating agency
Fitch has upgraded its long-term rating of Russia's NOMOS bank to 'B' from 'B-' (B minus). The
outlook for the Long-term rating is stable, the agency reported in a press release. The local currency rating of
NOMOS' 800 million-ruble bond has also been upgraded to 'B' from 'B-' (B minus). NOMOS'
other ratings remain unchanged as follows: Short-term 'B'; Individual 'D'; and Support
'5T'.
international consortium for managing and developing Ukraine's gas transportation system, a company press
release reports. *** At a session on Wednesday, the Gazprom executive board recognized as expedient a deal with the
stock in the Kaunas heat-electric generating plant (KTE). A Gazprom press release says that, for participation in a
tender for the right to buy Kaunas KTE property, a consortium has been organize that, other than Gazprom, includes the
companies Clement Power Venture Inc. (U.S.) and UAB Dujotekana (Lithuania). In accordance with the rules of the tender,
consortium members will set up a Lithuanian legal entity in which 99% of the stock will belong to Gazprom. The tentative
name for the new company is ZAO KTE. Gazprom's two partners in the consortium will receive the right to buy 48% of
ZAO KTE out of Gazprom's 99% stake in proportion to each of their contributions. *** Lukoil plans to bid alone at
an auction for 74.95% of the shares in Slavneft. "The company does not plan to involve a partner to bid in the
auction." Vagit Alekperov, the president of Lukoil, told Interfax. *** In 2001, the oil company
Surgutneftegaz's net profits to US GAAP before dividend payments on preferred stock came to $1.612 billion against
$2.0 billion the year before, the company report says. Company earnings last year dropped from $5.745 billion in 2000 to
$5.232 billion last year. Profit per share last year was $0.08 against $0.13 the previous year. The average weighted
number of distributed Surgutneftegaz common shares last year was 19.075 billion against 15.703 billion in 2000. ***
Russian Citibank, a wholly owned subsidiary of Citibank of the United States, has started working with private customers
in Russia and opened its first retail banking branch in Moscow. Citibank President Allan Hirst said at a press
conference Wednesday that Russia is a priority market for the bank. Citibank plans to expand its client base and range
of products through its branch for private customers, he said.
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