Page 9 - RusRPTMar20

Sberbank's market cap currently stands at approximately RUB5.49tn, meaning that the CBR's stake amounts to around RUB2.6tn.
The CBR is to book profits, given that Sberbank's book value is not marked to market and stood at just RUB72.9bn on the CBR's balance sheet, as of 2018.
In a potential scheme that involves an FX conversion between the CBR and NWF, the CBR ends up booking up to RUB2.5tn profit (the difference between the six​ month average market price and the book value of its Sberbank shares).
Half of the CBR's profits are, by law, transferred to MinFin and treated as Federal budget revenues. If the profits from the sale of Sberbank are ring​fenced, approximately RUB1.25tn will be transferred to MinFin as part of the Federal budget revenues, this helping to finance the additional social support measures in 2020​21.
Analysts believe that another half of the CBR's profits will be partially used to cover the CBR's losses in 2017​19 (in 2017​18, they amounted to RUB870tn, due to the banking sector’s RUB liquidity surplus and banking rehabilitation).
“However, if the profits from the sale of Sberbank are mixed with the CBR's other profits and losses, the amount transferred to the budget would be less, due to the banking sector RUB liquidity surplus and the CBR's expected losses induced by this environment. At this point, we do not know whether the profits from the Sberbank sale are going to be ring fencedok or not,” VTB Capital (VTBC) said in a note.
Meanwhile, the CBR receives approximately $40.5bn, which it is to sell on the market within 3​7 years, as announced, sterilising RUB2.6tn of ruble liquidity over that period.
The uniform sale of FX over 3​7 years implies selling $23​54mn per day on average.
“That is equivalent to temporarily increasing the oil cut​off price in the budget rule $2.50​ 5.90/bbl and is RUB​positive,” VTBC added. “As reported by Reuters, MinFin might complete the purchase of Sberbank by mid​2021.”
2.1 ​ ​Proposals for constitutional reform amendments become clearer
As the last amendments are submitted ahead of the referendum on the Constitutional Reform the proposals thrown into the public arena since the Duma voted on the bill in its first reading include:
● Removing the constitutional provision stipulating that the Duma is automatically dissolved if it refuses to approve the appointment of the Prime Minister three times in a row.
● Allowing former presidents to become members of the Federation Council (senators) for life, and raising the number of senators nominated by the president from 17 to 30.
● Creating a “mechanism” that would “prevent parliament from delaying the appointment of the Prime Minister and its government.” Inscribing in the constitution the indexation of pensions and social benefits to inflation and a ban on any law that would “reduce the social obligations of the state.” Introducing in the concept of “federal territory,” an area
9​ RUSSIA Country Report​ March 2020 ​ ​www.intellinews.com