Page 103 - RusRPTJul20

9.1.7​ TMT sector news
Putin requested that special support for IT be included in the national plan, cutting income tax from 20% to 3%, ​and cutting mandatory social security payments from 14.6% to 7%. IT companies could also get zero VAT for promoting their software abroad, along with other state subsidies. Eligible developers would have to show at least 90% from software sales and development. Previous reports and surveys showed that 15% of Russian software developers plan to cut at least 10% of staff, while 42% are considering layoffs. Industry associations warned the government of a ​possible brain drain in the sector in 2020-2021​.
On 22 June 2020, after the US market closed,​ ​Yandex​ and​ ​Sberbank announced that they had agreed terms to separate their JVs in e-commerce (Yandex.market & Beru) and fintech (Yandex.money). ​The terms of the split are in line with details previously published in industry journal The Bell, with Yandex consolidating the e-commerce business, and Sberbank consolidating 100% of Yandex.Money. The split is logical, in our view, as competition between the two ecosystems has intensified since Sberbank created an O2O JV with Mail.ru and said that there might be difficulties in running the e-commerce JV. The deal is a rare "win-win" for both companies. It allows Yandex to develop a fintech vertical, while e-commerce is high on Sberbank’s ecosystem priority list, and we believe the bank will look to partner with an existing Top-3 player. While we have been negative about the implications of Sberbank’s investments into its ‘ecosystem’ for the bank’s capital allocation discipline, we view the split with Yandex positively, with Sberbank estimating the realised profit from the deal at some RUB20bn. VTBC unchanged 12-mo TP of RUB270 implies an ETR of 39% and a Buy recommendation.
Industrial companies will reduce investments into the Industrial Internet of Things (IIoT) projects by 10% to RUB7.1bn ($101.1mn)​ because of the coronavirus infection spread, the Izvestiya newspaper wrote on Sunday, citing analysts from iKS-Consulting and spokespersons of Rostec corporation.
Russia's Federal Antimonopoly Service (FAS) blocked the acquisition of Vezet taxi operator by​ ​Yandex.Taxi​, the joint venture of Yandex internet major and Uber Technologies. Previously ​Yandex.Taxi put the deal on hold amid coronavirus epidemic​, but reportedly renewed the bid on May 15 and was refused. As reported by ​bne IntelliNews,​ ​Yandex snapped Vezet from its rival Mail.ru in 2019​, in a major deal that included 3.6% equity and $71.5mn in cash. With market share of about 12% Vezet was seen as significantly strengthening Yandex.Taxi's position, especially in the regions. But the negative FAS ruling claims that the deal would negatively influence the competitiveness in Russian taxi ordering market. The watchdog estimates that the combined market share would reach 70%, and top 80% in nineteen Russian regions. The estimates are much higher than previously calculated by independent analysts that saw Yandex.Taxi market share at 27% and Vezet being second-largest operator with 12%.
Russian internet major​ ​Yandex​ is playing with the idea buying out Uber Technologies’s stake in the Yandex.Taxi joint venture instead of holding an IPO ​of the taxi ordering service, Bloomberg reported on June 11 citing unnamed sources. As reported by ​bne IntelliNews,​ ​Yandex.Taxi is still pushing
103​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com