Page 104 - RusRPTFeb19

Despite the hype surrounding the state digitisation programme, Russia fell to 27th place in the global innovative rankings produced by Bloomberg but was still the third best in the Central and Eastern Europe (CEE) region and even beat Estonia. Russia is now on a par with Malaysia and Luxembourg. Compared to its peers Russia did exceptionally well, in third place amongst the New Europe economies. Russia’s strengths were productivity (score: 51), which is over twice as good as almost all the countries in the top 10, and manufacturing value added. Moreover, Russia was well ahead of Estonia (36th place) which has been a poster boy of digitisation thanks to its embrace of all things tech in the last two decades.
DXC Technology and Russia’s Luxoft, two major, NYSE-listed IT service providers, announced a definitive agreement for DXC to acquire Luxoft, reported East-West Digital News (EWDN) in the first week of January. At $59.00 per share in cash, the deal represents a total equity value of approximately $2bn, according to the press release. Still subject to customary conditions and regulatory approvals, the transaction is expected to be closed by June 2019. DXC expects the acquisition to “broaden [its] access to digital talents” and to be “value accretive, driven by complementary capabilities and offerings, differentiated solutions for customers.”
The number of Russian movie goers hit a record 56mn as of the end of 2018, and Russian movies earned RUB13.5bn ($196.7mn) at the box office, the press service of the Russian Cinema Foundation (Fond Kino) told TASS. Russian Culture Minister Vladimir Medinsky said earlier that the box office of Russian movies has doubled over the last 7 years, while the number of viewers that watched Russian movies exceeded 55mn in 2018. "On the last weekend of this year, traditional New Year movies will be released - the final part of the "Yelki Posledniye" [Last Christmas Trees] franchise, as well as the animation movie "Tri Bogatyrya i Naslednitsa Prestola" [Three Knight-Errants and the Heir to the Throne], which is the ninth movie in the franchise about epic heroes," the press service said, cited by Tass. "According to forecasts, the box office of Russian movies will reach RUB13.5bn [$196.7mn] by the end of the year, and the number of viewers will exceed 56mn," the press service added. In 2018, eight movies earned more than RUB1bn in Russia, the Cinema Foundation said. "Two of them are produced in Russia with the support of the Cinema Foundation. They are "Dvizheniye Vverkh" [Moving Up] with RUB2.9bn [$42.2mn] and Lyod [Ice] with RUB1.4bn [$20.4mn]. These movies attracted 11.5mn and 6mn viewers respectively," the press service added.
State Duma representatives have submitted amendments to the law on advertising, allowing beer to be advertised on television during sports programmes and on specialised channels after 1 January 2019. The first reading is scheduled for 18 December 2018. Beer advertisements on television have been banned since 2012, although an exception was made during the FIFA World Cup in 2018. However, the amendments expire at the end of this year and a potential easing in the regulations on television advertising would be positive for the segment in the medium term. In the last five years, beer market volumes have been declining at a 6% CAGR, reaching 66mn hl in 2017. This year, we forecast a 5% y/y increase, supported by the 3.4mn people who came during the World Cup, as well as by more favourable promotional conditions. If commercials on TV remain in place after 2018, volumes are unlikely to see incremental downside risks, while breweries would be able to compete better on brands while being less price aggressive.
104 RUSSIA Country Report February 2019 www.intellinews.com