Page 13 - RusRPTAug20

Our model does not include any additional gas volumes to China beyond the contracted 38bcm/a, which is to be reached in 2025F, we forecast. Given that we forecast the PoS gas price at around $214/kcm in the long term, or more than 30% above the European gas price implied by the futures curve, increasing gas supplies to China would imply additional upside to our financial forecasts.
2.5 ​ ​Russia’s Watcom Shopping Index regains three quarters of ground lost to coronacrisis
Russia’s Watcom Shopping Index regains three quarters of ground lost to coronacrisis
Russia’s Watcom Shopping Index has recovered three quarters of the ground lost during the coronacrisis, according to the latest data for week 26 of this year.
The index was doing better than in the last three years for the first two months of this year after real incomes began to rise in the fourth quarter of 2019 for the first time in six year and was ahead of game through until week 11 of this year into mid-March.
However, after the coronavirus (COVID-19) epidemic took hold towards the end of March the index began to fall rapidly even before the lockdown was imposed on March 30 in Moscow and then within a few days in most of Russia’s regional cities.
The index collapsed with foot traffic in the major malls in Moscow and St Petersburg falling to 70%-80% below their previous levels a year earlier.
But as the lockdowns began to be eased towards the end of June the index has recovered most of the ground it has lost by the start of July as urban residents in Russia’s two biggest cities go out to shop again and malls reopen for business.
The index fell from 517 in week 11 to a low of only 68 in week 16 in the middle of March but has since recovered to 354 as of the end of June.
That is still well down on the index score of 461 in 2019, 442 in 2018 and 470 in 2017 and remains at its lowest level since the index was founded in 2014, or three quarters (76.8%) of last year’s level.
Trajectory remains positive and the index is expected to continue to recover in the coming weeks all things being equal.
The big unknown is the possibility of a resurgence of infections caused by the Kremlin’s decision to ease the restrictions ahead of the recent referendum on constitutional changes called by Russian President Vladimir Putin at the start of this year that saw people come out in large numbers to vote in the controversial poll. In addition the Victory Day parade that was delayed from May was held in June, which also saw large crowds gather in Moscow for the event. Just over a dozen regions refused to hold similar local parades due to public health fears.
Experts say these large public gatherings could result in a surge in infections that will become apparent in about two weeks time and could lead to a re-imposition of restrictions. Moscow mayor Sergey Sobyanin was against ending the restrictions in June and has been the champion of drastic action to bring the epidemic under control in Russia.
13​ RUSSIA Country Report​ August 2020 ​ ​www.intellinews.com