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bne October 2018 The Month That Was I 9
Finance
Eastern Europe
Russia’s domestic debt – the OFZ trea- sury bills – is under pressure as for- eigners pull out of the market ahead of possible “crushing” sanctions that could be imposed on Russia this autumn. The Russian Government Bond Index (RGBI) reached its lowest point since July 2016, losing 2.19 pp over the last week alone. Long-term dated OFZs have depreci- ated by 12% since April, and the price
of the nine-year bonds have risen from a coupon of 7% per annum in April,
to between 9.1% and 9.2% now. The Ministry of Finance cancelled auctions in the last week because of the volatility on the market.
Russian state railway monopoly Rus- sian Railways (RZD) plans to buy back three issues of Eurobonds maturing
in 2020, 2022, and 2024 for a total $700mn, Reuters said on September 13 citing the company. Russian assets are under heavy sanction risk pressure and some companies might try to use the momentum to buyback its debt off the market cheaply.
The influential head of Russian state oil major Rosneft, Igor Sechin, does not see market conditions as fit to kick off the $2bn share buyback of the company, Interfax and Reuters said on September 12 citing Sechin's comments. Uncertainty over the $2bn buyback programme – the company’s first ever
– could undermine Rosneft's investor makeover drive. Previously the company started to deliver on a promise to cut debt, and scale back capex in an effort to improve capitalisation.
Russian pharmacy chain group 36.6 plans to make and open-subscription SPO worth 257% of current capital, the company operating pharmacies 36.6, A5, A.v.e, and Gorzdrav said
on September 11.
The Belarusian government is going to borrow up to $2bn on Chinese and Russian markets after 2019, while the
nation is not gong to cooperate with the International Monetary Fund (IMF) due to the fact that the country's authoritar- ian President Alexander Lukashenko seeks to avoid "a shock for residents".
Net capital outflow from Russia in January-August 2018 jumped 2.8-fold year-on-year to $26.5bn, according to the data from the Central Bank of Rus- sia (CBR). In August alone net capital outflow amounted to $5bn, as compared to July's data. Previously, due to the worsening external environment and higher sanction risks, the CRB increased its net capital outflow forecast for 2018 from $16bn to $30bn, at an average oil price forecast of $67 per barrel.
Central Europe
The government body created after the country’s third-largest bank ABLV went under has come up with a new action plan for a more efficient fight against money laundering in Latvia. The plan follows the evaluation of Latvia’s efforts to combat money laundering from the Council of Europe’s Moneyval Committee.
Amidst the economic boom, Czechs are less willing to pay for credit
card loans, the latest data show. In July, customers took out credits for CZK19.5bn (€760mn) – the lowest number since August 2010. Polish state investment fund PFR acquired a 35% stake in Solaris Bus & Coach, a bus maker specialising in electric and other low-emissions bus types that it sells to city transport companies in Poland and internationally. The previous day, 100% of Solaris was sold to Spanish train and tram maker CAF.
Southeast Europe
The Romanian bourse’s blue chip index BET expanded to include
newly listed foodservice operator Sphera Franchise Group, and winemaker Pur-
cari Wineries. The BET index will thus include 15 companies and it will cover more economic sectors relevant for the country's economy.
Eurasia
Iran’s Tehran Stock Exchange hit
a high as ordinary investors struggled to find investment options amid the country’s economic difficulties. The exchange’s main index, the Tedpix, registered a high of 559bn shares worth IRR8.433 trillion ($200mn) traded on September 10.
Bishkek-based Highland Capital has received backing from the World Bank’s International Finance Corporation for establishing the first institutional private equity fund with a focus on Kyrgyzstan. The new fund hopes to expand access to finance for SMEs in the country by providing equity and equity-like financing in a number of sectors including services, healthcare, education and media.
Mongolia asked Russia to provide financial assistance worth $1.5bn
for joint projects in the energy sector, including the modernisation of HPP-3 and HPP-4 hydropower plants. During winter, both heating and power plants rely heavily on coal in Mongolia's capital Ulaanbaatar, which accounts for almost half of the country’s population.
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