Russian News: August 5th, 2008!

RBC, 05.08.2008, Moscow 16:46:33.The Russian stock market continued falling virtually across the board in the afternoon today. As of 4 p.m., the MICEX index was down 2.7 percent at 1,412.31 points and the RTS index was down 3.43 percent at 1,830.76 points. Among the worst performers on MICEX were Gazprom (down 4.25 percent), LUKoil (down 3.69 percent), Rosneft (down 5.38 percent), and Uralkali (down 12 percent). Although banking stocks fared better than the market during the day, they also decreased somewhat, as Sberbank lost 1.32 percent and VTB dipped 0.89 percent.

RBC, 05.08.2008, Moscow 15:49:14.Russia’s Economy Ministry has issued a draft proposal for the country’s long-term social and economic development until 2020 for consideration by the government, said Oleg Fomichev, the head of the ministry’s strategic planning and budgeting department. The document is to be considered at meetings that will be chaired by Russia’s First Deputy Prime Minister Igor Shuvalov during August and early September, and the Economy Ministry is expected to submit the amended concept to the government for the second time at the beginning of September, Fomichev noted. The government is projected to discuss the concept on September 22.

RBC, 05.08.2008, Moscow 14:23:24.Russia’s inflation amounted to 9.3 percent in the first seven months of 2008 and 0.5 percent in July alone, compared to 6.6 percent and 0.9 percent for the same periods of 2007, respectively, the Federal State Statistics Service (Rosstat) reported today. Core inflation (excluding price fluctuations in certain products caused by administrative and seasonal factors) stood at 0.8 percent in the past month and 7.6 percent in January-July.

RBC, 05.08.2008, Moscow 12:20:26.Investor expectations deteriorated in July, following the sharp criticism of the Russian metals and mining company Mechel made by Prime Minister Vladimir Putin, and concerns arose that political risks to investors would continue climbing in Russia, analysts at Merrill Lynch say. After Mechel had been charged with tax evasion and the implementation of an aggressive and dishonest pricing policy, investors became worried that it was an attempt to redistribute assets in favor of the government, similar to the expropriation of the now defunct YUKOS. Experts believe that although the Russian government has recently tried to reassure investors by several positive announcements, uncertainty will remain during the next few weeks. Freezing domestic coal and metal prices may become an important consequence of the assault on Mechel, analysts note.

RBC, 05.08.2008, Moscow 09:34:03.Severstal has completed the acquisition of the US steelmaker Esmark Inc. through a merger of the Russian company’s subsidiary Severstal Wheeling Acquisition Corp. with the US company. The integrated company’s name is Severstal Wheeling Holding Company, and Esmark’s shares will be de-listed from the Nasdaq.

RBC, 04.08.2008, Moscow 19:48:11.Russia’s Agriculture Ministry has proposed a series of measures to streamline the agricultural land policy which are to be considered at tomorrow’s meeting of the government’s agriculture commission, Deputy Agriculture Minister Alexander Petrikov told journalists today. Among other steps, the ministry suggests that land plots should be handed over to municipal governments after the death of their owners, fines for inefficient use or misuse of land should be increased, and the exact criteria for shifting land plots from one category to another should be clearly defined. To cut land development costs, the ministry suggests that subsidies from the federal and regional budgets should be introduced. These moves are to be implemented within a year. In the mid-term, the ministry proposes to reinforce the governments role in land development, set up a state agricultural land use monitoring system, build an agricultural land registry and restore soil fertility.