fbpx

RA’s Daily Russia News Blast – Oct. 23, 2007

The food industry and the government have agreed to freeze prices on a range of basic foodstuffs in Russia. The freeze is expected to ease discontent over recent sharp increases in prices, caused by inflation. The “Conception for Long-Term Socio-Economic Development to 2020”, developed by the Ministry of Economic Development and Trade, signals that the Ministry is “already planning for a long-range drop in competitiveness.” Russia may spend as much as $500 million a year to help developing nations increase living standards as it seeks to enhance its global influence. Deputy Finance Minister Sergei Storchak said, “This isn’t charity, this is development aid.” A new proportional representation electoral system will give a greater voice to Russia’s regional electorate, greatly increasing the significance of the regional party lists in the upcoming State Duma elections. The Russian real estate market is set for a brief hiatus in the wake of the recent global credit squeeze, but long-term repercussions are unlikely, according to analysts. New Russian Generation, a power-focused fund “well-positioned to take advantage of the liberalization process in Russia’s electricity industry”, will seek to raise at least $200 million this year in a London listing. UralSib, the country’s seventh-biggest banking group by assets, is planning an initial public offering for the fall of 2008. According to analysts’ estimates, a 25% share float would enable the company to raise $300-400 million. The Irish Quinn Group could buy the Radisson SAS Slavyanskaya in Moscow in a deal estimated to be worth $240-280 million. A study by Ernst & Young showed that Brazil, Russia, India and China – the “Bric” countries – raised $27bn in 118 IPOs in the first quarter of the year. “The record numbers of IPOs in the emerging markets show that it is these countries that are driving global economic growth.” Imperial Energy, a UK-based company operating in west Siberia, which had faced threats of having its operating licenses revoked by Russia’s environmental watchdog Rosprirodnadzor, has secured a deal to supply the Transneft national grid with crude oil. Mitsubishi Motors, Japan’s fastest growing car exporter, could increase vehicle sales in Russia as much as 40% next year amid steadily increasing demand. Evraz Group, Russia’s second-biggest steelmaker, has bought the shares of Italian steel-rolling plant Palini e Bertoli SpA it didn’t already own, paying $108 million for the 25% stake. The Chelyabinsk Zinc Plant, which produces about 60% of Russia’s zinc, has started direct sales to Ukraine and Belarus. The European Commission’s Moscow Office head, Marc Franco, said that Russian companies do not have energy market access problems. “There are no restrictions in the proposals of the European Commission on the participation of foreign investors in the production and network transmission of gas and electricity.” Russia and the United States are trying to build newfound trust, according to US Secretary of State Condoleezza Rice. “America’s relationship with Russia will remain large and complex: a mix of cooperation and competition, friendship and friction […] our future can be brighter than our past.” Rice also, however, “lambasted” Moscow for using its oil and gas wealth as a “political weapon“. The foreign ministers of Russia and Japan are discussing disputed claims to four islands off Hokkaido, which were seized by Russia at the end of World War II. The foreign ministers of China, Russia and India will meet this week in northern China to discuss common concerns, fueling speculation that “the consultations are aimed at forming an alliance to counter the inflience of the US in the region.” A shareholder dispute involving Ukraine’s biggest oil refinery has resulted in Russia’s Tatneft cutting off oil supplies to UkrTatNafta. Russian prosecutors have asked a court to hand a nine-year prison term to Boris Berezovsky, the Russian tycoon and Kremlin opponent being tried in absentia on embezzlement and money laundering charges. More than 100 masterpieces of art from the great Russian museums are being lined up for an exhibition at London’s Royal Academy early next year. The RA has asked the British government to send a letter to the Russian authorities assuring them that the works loaned to the UK will be protected from seizure by companies with a financial claim against the Russian state.