Windows to Russia

Stock market upbeat at close:
Russian stocks closed upwards, with the Micex index rising 4.36 percent to 851.35 points, and the RTS index finishing at 740.94 points, 2.67 percent above yesterday’s closing. The trading volume reached RUB 63.46bn (approx. USD 1.91bn) and USD 7.24m on Micex and the RTS, respectively.

Russia’s monthly inflation lower than in some European countries: Russia’s February inflation proved to be lower than in a number of European countries, according to the Russian Federal State Statistics Service’s (Rosstat) report on the increase in consumer prices based on the publications by Eurostat and national statistics services.

Russian banking system stabilizing, finance minister says: The Russian banking system’s international liabilities currently stand at nearly $150bn, and international assets at $147bn, Russia’s Deputy PM and Finance Minister Alexei Kudrin told a banking conference today. Consequently, the banking system’s assets and liabilities have almost evened out, he noted. “It’s a stabilizing moment,” Kudrin stressed. Assessing the current situation in the banking sector, Kudrin pointed out that it was “thanks to the Central Bank’s efforts that [the situation] has recovered.” At the same time, the minister also said, “the Central Bank sees those who are involved in doubtful transactions.”

Russia to see considerable trade surplus in 2009: The Bank of Russia expects the trade surplus to exceed $50bn in 2009, First Deputy Chairman of the Central Bank Alexei Ulyukayev told a Russian banking conference in Moscow today. “We expect a significant decrease in imports as a result of the ruble’s devaluation effect. With this in mind, the trade surplus will be significant and may even top $50bn,” he observed.

Medvedev to visit Germany: Russian President Dmitry Medvedev will pay a working visit to the Federal Republic of Germany at the invitation of Federal Chancellor Angela Merkel on March 31, 2009. According to the Russian leader’s press office, the high-level talks in Berlin will focus primarily on the issues of the global financial and economic crisis within the context of the upcoming G20 summit in London on April 1-2, 2009.

Laid-off workers to get assistance, PM asserts: By mid-March, some 550,000-560,000 people were made redundant in Russia, Prime Minister Vladimir Putin stated at a meeting with the Federation of Independent Trade Unions of Russia and primary trade union organizations. The official number of people out of work reached 2 million, or 2.6 percent of the total economically active population. According to Putin, 1.14 million people more are working half-time or on forced leave.

Top 100 banks saved from bankruptcy: “Russia’s top 100 banks have been saved from bankruptcy,” he stated. Describing the overall situation in the country’s banking sector, Kudrin said it had stabilized thanks to the Central Bank’s efforts. To illustrate his statement, he cited Russia’s international assets and liabilities of approx. $147 billion and $150 billion, respectively. The fact that the figures have come so close to each other is a sign of stabilization, according to the minister.

Russia’s GDP fall to be similar to that elsewhereThe anticipated decrease in Russia’s GDP is expected to reach 2.2 percent in 2009, which is comparable with other countries’ performance, Economy Minister Elvira Nabiullina said during the ministry’s extended board meeting today. GDP is projected to drop between 2.6 and 3.5 percent in the United States, 2.1-3 percent in EU countries, and by a maximum of 5.8 percent in Japan. Meanwhile, export-oriented countries, particularly transition economies, may face a deeper recession, she said, with GDP likely to plummet 9-11 percent in Ukraine, 11 percent in Latvia, and 7-7.5 percent in Hungary.

Russia, Transnistria to ink economic cooperation pact
Russia and Transnistria plan to sign a comprehensive agreement on the grounds for economic cooperation, Transnistrian leader Igor Smirnov told journalists today. The need for such an accord was on the agenda at his meeting with President of Russia Dmitry Medvedev, and it is currently in the works. According to Smirnov, the accord is of the utmost importance, as it would allow Russia and Transnistria to cooperate on a broad range of issues.

Russian shares finish up steeplyRussia’s benchmark indices closed sharply higher on Monday, with the Micex index up 7.29 percent from the previous close, at 849.82 points, on a trade volume of RUB 65.81bn (approx. USD 1.97bn), and the RTS index up 5.78 percent at 737.19 points amid a trade volume of USD 6.79m. On Micex, Sberbank surged 10.17 percent, Gazprom jumped 8.26 percent, VTB soared 9.49 percent, Tatneft rose 6.68 percent, and Polyus Gold climbed 6.95 percent. On the RTS, Lukoil gained 7.53 percent and Norilsk Nickel advanced 7.35 percent.

Gov’t to mull plans for making Moscow global financial hubThe Moscow government plans to make the city a huge international financial hub, a Moscow committee responsible for state borrowings has announced. On Tuesday, the Moscow government is set to consider a decree outlining a plan for the Russian capital’s development as a national and global financial center. The draft document highlights the considerable changes in the geography of global financial hubs that took place over the recent years. New financial centers such as Hong Kong and Singapore have joined the top ten list of the recognized leading financial hubs including Tokyo, Frankfurt, and Geneva. Furthermore, other financial centers in emerging economies, such as Shanghai and Mumbai, are seeking to achieve this same feat. This trend reflects the new realities of the rapidly changing world, where emerging countries, having considerably strengthened their positions on industrial and commodity markets, are now claiming leadership in global finance, the document reads.

Aeroflot launches bid to buy into Czech AirlinesAeroflot – Russian Airlines has submitted documents to the Czech Republic’s Finance Ministry that confirm its interest in participating in a tender for the privatization of a 91.5-percent stake in Czech Airlines (CSA), the Russian company’s press office has announced. The bid was submitted by a Czech legal entity on behalf of Aeroflot, in full compliance with the terms of the tender. The bid contained a general business plan confirming Aeroflot’s intentions to maintain CSA’s status as the Czech Republic’s national airline based in the Ruzyne Airport serving Prague. The plan also outlines the general areas of both airlines’ joint development in case of the deal’s completion.

Russia to slash spending on gov’t staff: The administration of Russia will be cut by RUB 38.7bn (approx. USD 1.14bn), or 22 percent, Russian Finance Minister Alexei Kudrin told a briefing following a cabinet meeting on Thursday where amendments to the federal budget for 2009 were under discussion. The figure includes all expenses connected with public management, Kudrin explained. He stressed that the cuts would not affect the court system, however, which would be funded in full.

Budget revenue to shrink in Russia: According to revised data, Russia’s budget revenue will drop 27.6 percent in 2009 compared to 2008, Deputy Prime Minister and Finance Minister Alexei Kudrin told a press conference following a cabinet meeting on Thursday. In 2008, Russia’s budget revenue stood at some RUB 9.258 trillion (approx. USD 273.7bn), while budget surplus amounted to roughly RUB 1.697 trillion (approx. USD 50.2bn). The amendments to the federal budget for 2009 have yet to be refined, Kudrin said, adding that they were purely technical amendments with no particular significance. He also explained that subsidies earmarked for various Russian regions might be reallocated in a number of areas, and the government would determine the possible ways to use its budget reserves.

Russian retail sales slide in February: Retail sales decreased 2.4 percent to RUB 1.05 trillion (approx. USD 30.51bn) in February 2009 compared to the same month a year earlier, the Federal State Statistics Service (Rosstat) reported. In the first two months of 2009, however, retail sales inched up 0.3 percent to just shy of RUB 2.129 trillion (approx. USD 61.85bn) against January-February 2008. Enterprises and individual entrepreneurs operating out of fixed premises accounted for 86.4 percent of total retail sales, while retail markets and fares represented 13.6 percent. Food products, including beverages and tobacco, made up 48.5 percent of total retail sales, while non-food items accounted for 51.5 percent (against 46.7 and 53.3 percent, respectively, in February 2008).

Russia’s unemployment rate creeping up menacingly: Russia’s total number of unemployed jumped 20.6 percent in February 2009 year-on-year, to over 6.4 million people (8.5 percent of the economically active population), the Federal State Statistics Service said today. This also shows a 4.9-percent increase from January 2009.

Putin slams money printing as inefficient : Russia’s Prime Minister Vladimir Putin finds printing more money an inexpedient and even dangerous way to cover the budget deficit amid the economic turmoil. Budget deficits are in store for Russia not only this year, but for a few more years afterwards, he stressed at today’s government meeting. This, in the PM’s opinion, confers even greater responsibility on the government and calls for a conservative budget strategy, as well as maintaining confidence in the national financial system. The budget deficit, therefore, must be tackled in a civilized manner, with the help of globally accepted means – that is, from reserves stashed away during the previous year or, if necessary, through loans obtained on market terms.