Page 8 - bne IntelliNews newspaper 14 July 2017

The Regions This Week
July 14, 2017 www.intellinews.com I Page 8
Eastern Europe
Two of Russia's "big three" mobile operators MegaFon and VEON (former VimpelCom) will split their joint 50/50 venture in one of country's largest handset retailer Euroset, the companies said on July 12. MegaFon will consolidate a 100% stake in Euroset, leaving half of the chain's stores to VEON.
Siemens is threatening to press charges against parties that moved two gas turbines "against its will" to the annexed Russian Crimea peninsula in violation of international sanctions, Reuters reported on July 10. Interavtomatika, a Russian company in which Siemens owns a 47.5% stake, is supplying the German company's turbines to power plants in the peninsula in the first known breach of Crimea-related EU sanctions.
Russian natural gas major Gazprom warned inves- tors that its major projects such as Nord Stream
2 or Turkish Stream pipelines could be "delayed or prevented from being finished" by the new sanctions on Russia proposed by the US Senators, Gazprom said in a Eurobond prospectus. The US Senate on June 14 overwhelmingly backed deeper sanctions against Russia, which will be reviewed by the House of Representatives in July.
Ukrainian parliament, the Verkhovna Rada, has passed a bill on pension reform in first reading, which is necessary to secure a new loan tranche from the country's main donor, the International Monetary Fund (IMF).
Nato opened its new representative office in Kyiv on July 10 with expanded functions that include implementing Nato standards in Ukrainian security and defence systems, conducting informational campaigns and engaging in practical cooperation.
The Belarusian delegation to the OSCE slammed Russia’s hybrid war on Ukraine and supported the OSCE Parliamentary Assembly (PA) declara- tion reiterating "condemnation of the temporary occupation" of Ukraine's Crimea by Moscow in
2014 and "the ongoing Russian hybrid aggression against Ukraine in Donbas".
Russia’s foreign currency reserves cross the $400bn line for the first time since 2013, thanks to bond issues and inbound capital investment.
Russia is on course to hit its target of increasing trade turnover with China to $80bn this year after the volume grew by a quarter y/y in the first half of this year to $39.78bn, according to General Admin- istration of Customs Administration of China.
Russia saw its first current account deficit in years after the second quarter balance fell by $300mn, according to CBR on July 11.The cumu- lative CA surplus for January-June still amounted to $23bn.The deficit is due to falling oil prices and the rise in imports. The deficit will probably lead to ruble weakness in the autumn say analysts.
Ukraine's consumer price index (CPI) jumped 1.6% m/m to 15.6% y/y in June, led by a 3.3% m/m growth in food prices, the State Statistics Service reported on July 7. In May, CPI increased 1.3% m/m (13.5% y/y). June’s growth in food prices was driven by eggs (18.4% m/m), vegeta- bles (16.4% m/m), and fruits (13.5% m/m).
The foreign reserves of Belarus increased
by $1.322bn, or 25.2% m/m to $6.561bn in June, according to the NBB, thanks to June's placement of $1.4bn worth of dual-tranche US-dollar-de- nominated Eurobonds with five-year and ten-year maturities. Belarus also received a new $300mn tranche from the Russia-led Eurasian Fund for Stabilisation and Development (EFSD).
Russian-focused hedge fund Prosperity Capital Management enjoyed a six-fold surge in profits as Russia returned to growth after enduring a painful two-year recession,bne IntelliNews re- vealed. Prosperity, one of the largest investment managers active in Russia, saw its profit jump to £5.47mn in 2016 from £834,562 a year prior.