Page 9 - bne_Magazine_October_2017

bne October 2017 The Month That Was I 9
Finance
Central Europe
European Central Bank head Mario Draghi dismissed Estonia’s idea of issuing its own digital currency. Draghi said that a Eurozone member state cannot offer any currency other than the euro.
The European Commission has okayed the merger of the Baltic opera- tions of Swedish bank Nordea with
its Norwegian peer DNB to create a new entity under the name of Luminor. By merging into Luminor, Nordea and DNB attempt to challenge the dominant position in the Baltic market held by Sweden’s SEB and Swedbank.
Warsaw was rated the most attractive financial centre in the CEE region, according to a survey by China Develop- ment Institute and London-based con- sultancy Z/Yen. The report measures the attractiveness of financial hubs in five areas: business environment, human capital, infrastructure, development of financial sector, and reputation.
Southeast Europe
FDI in Albania slumped by 20% y/y to €200mn in the second quarter of 2017, according to preliminary central bank data. Most FDI in the country is linked to major short-term projects such as the Trans Adriatic Pipeline (TAP) project and the HPP Devoll, and analysts warn more diversification is required.
Romania’s largest private healthcare provider MedLife plans to issue cor- porate bonds with a maximum nominal value of RON274.2mn (€59.6mn) on the Bucharest bourse. MedLife, which carried out an IPO last year, has been aggressively strengthening its position on the local market.
The Guardian revealed a $2.9bn money laundering scheme involving the Azerbaijani government, opaque Azerbaijani companies, the Russian
government, and four UK-registered companies. The "laundromat" slush fund formula was used to pay for public rela- tions for the government of Azerbaijan and for a number of luxury services and goods for its elites, it claimed. First lady and Vice President Mehriban Aliyeva is allegedly connected to one shady com- pany involved.
Eastern Europe
Russia raised $1.5bn in a top-up of
its 2027 Eurobond and $2.5bn in a top-up of its 2047 Eurobond issue on September 20. Demand for both top-ups was $6.6bn. Russia planned to raise $4bn on the global financial market in new Eurobonds, to replace debt matur- ing in 2018 and 2030. That would help the finance ministry to postpone pay- ments on the external debt.
Ukraine placed $3bn in 15-year Eurobonds at 7.375% per annum on September 18. Kyiv mandated JP Morgan, BNP Paribas and Goldman Sachs as bookrunners. The orderbook for the Eurobonds was six times over subscribed.
Russian banks earned more in the first eight months of 2017 than in all of 2016. The profit of Russian banks in January-August 2017 reached RUB997bn ($17.3bn), according to the CBR. By this time last year banks had earned only RUB533bn and earned RUB945bn for the full year.
Ukrainian banker Sergiy Tigipko has applied to purchase the Lviv-head- quartered VS Bank, a subsidiary of Russia's state-owned giant Sberbank that has been told to leave the country. The documents to take over VS Bank have already been submitted to the Anti- monopoly Committee of Ukraine (ACU).
Sweden's Nordea Bank is think- ing about quitting Russia, Vedo- mosti reported on September
19. Local lenders Loko Bank and
Sovkombank are mentioned as pos- sible buyers of its assets. Barclay and Deutsche Bank are among other foreign lenders which have scaled down their Russian operations.
Eurasia
The Iranian central bank’s Iran Credit Scoring Company (ICSC) is to launch a national rating system for banks. Iranian banks, companies and citizens cannot currently turn to any recognised rating system to assess their creditwor- thiness. US credit rating agencies are banned in Iran.
Kazakhstan will issue Islamic bonds, or Sukuk, worth up to $300mn in 2018. Only two Islamic banks operate
in the country. Al Hilal Bank, created as part of an intergovernmental agreement with UAE, and Zaman Bank.
Largest independent energy trader Vitol increased its cash-for-crude loans to Kazakhstan’s state-controlled companies to $5bn. The agreements provide Kazakh crude oil to Switzerland- based Vitol in exchange for financing. Vitol has stood as a dominant trader
in Kazakhstan’s oil industry for over
a decade, shipping Kazakh oil exports to Russian ports and selling them to European refiners.
Kazakhstan’s sovereign wealth fund wants to float flagship airline Air Astana and major uranium miner Kazatomprom as early as next year. Investment banks and legal advisers have been hired to conduct due dili- gence checks.
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