Page 7 - bne IntelliNews weekly newspaper – Russians lose showdown at EBRD AM

The Regions This Week
May 12, 2017 www.intellinews.com I Page 7
Eastern Europe
In its latest outlook update, the EBRD sees Rus- sia’s GDP growth at 1.2% and 1.4% in 2017 and 2018, respectively. This is a more conservative outlook than that of the Russian government, which recently forecast it at 2.o% for 2017. In the same report, the EBRD kept unchanged its No- vember forecast for Ukraine’s real GDP growth in 2017 at 2% y/y, while it forecasts that Belarus GDP will decline 0.5% in 2017 instead of the previously expected 1% growth.
Sales of cars and light commercial vehicles in Russia increased by 6.9% y/y in April, following
a 9.4% y/y gain seen in March. In January-April 0.452mn vehicles were sold, up by 2.6% y/y, ex- panding on the 1% rise seen in the January-March period, which was the first quarter of growth on the Russian car market in four years.
Moody’s upgraded the outlook on the ‘Baa1’ issuer and debt rating of the International Investment Bank (IIB) from stable to positive. The action is driv- en by “the increased diversification of the IIB’s loan portfolio and the maintenance of relatively strong asset quality”, as well as “the improved credit qual- ity of the IIB’s treasury portfolio” and “the increased diversification of its funding sources”.
Russian wine importers could be hit by the Fi- nance Ministry lifting the excise duty discounts for foreign wines from protected geographic regions (IGP/AOP for French wines and DOP/ DOC for Italian wines), Kommersant reported. The ministry argues that such discounts should only be applied to domestic wines. Industry par- ticipants surveyed by Kommersant warned that should such a rule come into effect and retroac- tive claims be made, up to 80% of the wine import market players could quit the market.
Russia’s Consumer Price Index registered 4.1% year-on-year increase in April, down from 4.3% seen in March. The annual consumer price growth has almost reached the 4% target set by the Cen- tral Bank of Russia, which has managed to curb
inflation by more than threefold from the beginning of 2016 to the lowest level in post-Soviet history.
Russian state-controlled oil major Rosneft is facing difficulties finalising the $12.9bn acquisi- tion of India’s Essar Oil, its largest foreign deal to date, according to a report by Reuters, citing unnamed sources close to negotiations. Report- edly, banking and industrial sources claim that six Indian state banks and financial institutions accounting for about $500mn of Essar’s debt are blocking the deal that Rosneft had initially hoped to close by the end of 2016.
Talks between Turkey and Russia on the former procuring the S-400 advanced air defence mis- sile system have “matured”, but the two coun- tries need to sort out some pricing issues, Turkish Defence Minister Fikri Isik was reported as say- ing. Ankara turned to Russia to buy the missile system when in 2015 it cancelled a controversial deal with China Precision Machinery Import and Export Corp (CPMIEC).
The Russian ministries of finance, economy and energy have drafted a bill requiring Rosneftegas to pass on 100% of the dividends it receives from its stakes in state companies to the budget, ac- cording to a report by Vedomosti. Rosneftegas,
an infamous holding which controls stakes in state energy giants Rosneft (50% plus one share), Gazprom (10.97%), and RAO UES (23.36%), has a complicated quasi-state ownership scheme that has allowed it to duck government dividend re- quirements for state-controlled companies.
“Ukraine will issue a Eurobond in the second half of this year, but the timing and the size of the bond have not been determined yet,” Ukrain- ian Finance Minister Oleksandr Danylyuk told bne IntelliNews on the sidelines of the EBRD’s annual meeting in Cyprus. Danylyuk said that he was in the process of reviewing Ukraine’s debt obliga- tions and drawing up a strategic borrowing plan for the coming years.