Page 86 - bne IntelliNews Russia Country report May 2017

on certain items remained in place. In response to the continued restrictions, Turkey halted purchases from Russia of wheat, maize and sunflower seeds by removing Russian items from a duty-free import scheme on March 15. Following a meeting between Turkish President Recep Tayyip Erdogan and Vladimir Putin earlier this month in the Russian Black Sea resort of Sochi after which the Russian leader hailed the return of "full-format" relations, Russia agreed to lift all sanctions imposed on imported items from Turkey except tomatoes.
The import of Turkish tomatoes to Russia remains on hold . Russian farmers have started to construct greenhouses and need to deleverage. We note that concerns over the resumption of Turkish imports, the appreciation of the local currency, and the level of government subsidies have become key factors for a number of agricultural companies in Russia, which have stopped greenhouse projects, including Rusagro.
9.1.7 TMT sector news
Russian President Vladimir Putin called for the development of IT and other new technologies to be made a priority, in his keynote speech at the St Petersburg International Economic Forum (Spief) on June 2, adding that state-owned companies should work much more closely with innovative startups. “Russian IT companies are certainly competitive globally,” he said, speaking to a packed plenary session. “Local professionals are not just offering a top-quality software product, but they’re basically creating a new field of knowledge.” According to Putin, new legislation for the active introduction of digital technology in all spheres of life needs to be created, with a special focus on information security of the government, business and citizens. “The government will support companies developing digital technology and competences that can be used across various industries,” Putin said. “Those include big data, artificial intelligence and neurotechnology, the internet of things, virtual reality and a few others.”
The Russian venture capital market recovered in 2016, with the amount of venture deals estimated at $894mn from $383mn in 2015, according to the annual study of RG Partners compiled in partnership with EY and East-West Digital News . “Market growth was essentially driven by a dramatic increase in expansion deals, whereas the volume of seed- and startup-stage deals fell to new lows,” Arseniy Dabbakh of RG Partners notes. The total amount of deals remained flat at about 300, but the average deal value jumped from $1.3mn to $3mn. There were 11 exits in 2016, with transactions amounting to $663mn. “ The euphoria of 2012-2013 was followed by two years of apathy as the international sanctions against Russia, the plunge of oil prices and of the ruble alike took their toll,” EY Partner Anton Ustimenko explains in the report. Ustimenko hopes that the upturn in exits in 2016 indicates that a significant part of the past market will come back to the innovation ecosystem this year.
As Russian authorities move to install tighter controls over the internet, a bill banning anonymous online messenger apps has been submitted to the State Duma , the lower chamber of the Russian parliament. The bill requires that users of popular messenger apps like WhatsApp and Telegram, identify themselves with their mobile phone number. Meanwhile, companies running the apps would have to provide information on their users to
86 RUSSIA Country Report May 2017 www.intellinews.com