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bne Invest
July 12, 2019 www.intellinews.com I Page 16
Russia's VTB bank ups stake in developer PIK to 23%
Russia's second-largest state-controlled VTB Bank increased its stake in country's largest real estate development group PIK from 7.57% to 23.05%, Reuters reported on July 5 citing the bank and without providing further details.
Previous reports suggested that PIK might have to raise RUB170bn-250bn ($2.6bn-3.3bn) of banking loans to comply with the new residential housing rules coming into effect as of July 1 2019, which could be behind deeper integration with VTB.
The founder and CEO of PIK previously Sergei
Gordeev was the controlling shareholder of PIK with 74.6% stake, while 17.8% in the real estate major is free float.
As analysed by bne IntelliNews, the changes will ban pre-selling apartments, which has been a favourite way to finance the construction of buildings for Russian developers. Now the homeowners will pay their money into escrow accounts that the developer can only tap once the building is complete.
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Ukraine’s central bank cancels limit on dividend repatriation
The National Bank of Ukraine (NBU) has cancelled all limits on repatriation of dividends, "in line with the currency liberalisation and for improving the investment climate," the regulator said in a statement on July 9.
The decision takes effect on July 10. From this date, business with foreign capital is no longer subject to the limit of €12mn per one legal entity on transferring dividends abroad or to non-resident accounts in Ukraine. In May, the regulator increase the limit on dividend repatriation to €12mn from €7mn per month per company.
This currency easing will not have any adverse impact on the macroeconomic stability, the central bank believes.
As reserves build and the macroeconomic situation stabilises the central bank is gradually
unwinding the capital controls that were put in place to preserve the country’s hard currency reserves during the worst of the economic crisis in 2015-2016. Hard currency reserves are now over $20bn, or more than three months of future import cover, the minimum economists believe is needed to ensure the stability of the national currency, and the positive balance of payments is supporting the value of the hryvnia.
In January-June, businesses transferred abroad dividends of $1.27bn, including purchased foreign currency in the amount $1.07bn. The value of purchased and transferred currency in 2019 is respectively by 14% and 20% lower year-on-year, and currently, account for only 4% of the total FX demand of bank.