Russia

OPEC spats are less important than its sweet spot

6 July 2021

The UAE stymied a deal to unwind oil output cuts. That will further strain relations with Saudi Arabia, but Riyadh will probably find a compromise. Meanwhile, the cartel and its allies have unusual scope to keep crude prices high without losing market share to U.S. producers.

Russian miner is gold standard in governance chaos

1 July 2021

London-listed Petropavlovsk kept CEO Denis Alexandrov even after shareholders blocked his appointment to the board. It follows extended battles between investors that pummelled the $1 bln group’s shares despite a buoyant yellow metal. The latest twist makes a recovery doubtful.

UAE takes relaxed view of Deripaska sanctions risk

24 June 2021

Mubadala has bought 2.6% of En+ from the Russian oligarch’s ex-wife. The $243 bln Abu Dhabi fund is banking on the green strategy of the aluminium and energy group, which has taken steps to curb Oleg Deripaska’s influence. Still, the UAE is taking a punt that these controls work.

Russian gold IPO hunters can afford to wait

8 June 2021

London listing candidate Nord Gold boasts scale, healthy margins and a decent dividend. But it’s owned by a tycoon and his sons. Given miners’ track record in snubbing minorities, investors may find it preferable to wait for the stalled IPO of peer GV Gold to return.

Rusal’s upside from clean break only goes so far

19 May 2021

The $6 bln aluminium maker’s plan to demerge carbon-heavy assets could unlock value if ESG-focused investors value the other parts more highly. But the greener entity will still have 28% of polluter Norilsk Nickel and the risk of U.S. sanctions snapback. That might cap any gains.

Russia has defences against U.S. sabre-rattling

25 March 2021

Given the U.S. president reckons his Russian counterpart is a “killer”, new sanctions on Russian government debt are possible. Jumpy prices forced Moscow to cancel a bond auction. But with a trade surplus and low external debt, Kremlin finances will hold up.

SocGen’s sober revamp could use Russian vodka shot

10 March 2021

The 19 bln euro lender is overhauling its retail business to boost profitability. A bolder move would be to sell the Russia unit, which might fetch up to 2.9 bln euros from a rival like Gazprombank. CEO Frederic Oudea could then focus on more lucrative eastern Europe and Africa.

Sberbank can afford to wait for its tech ambitions

4 March 2021

CEO German Gref wants the $85 bln Russian lender to earn 60% of revenue from services like e-commerce and streaming by 2030. Last year they brought in just 2% and made a loss. Without a clear plan, investors will treat it like a bank. At 1.2 times book value, that’s not too bad.

Putin has the cash to ease one driver of protests

22 February 2021

Anger at the Kremlin is about falling living standards as well as Alexei Navalny. Fiscal rules have complicated efforts to help the poorest Russians. But higher oil prices make it easier to placate those opposition supporters whose gripes are economic rather than political.

Russian retail IPO offers crowded bet on misery

15 February 2021

Fix Price, the country’s biggest discounter, may list in London and Moscow. It’s growing rapidly, thanks to pressured incomes in its home market and resilience to online rivals. That could justify a price tag of $9 billion, so long as investors shrug off rising competition.

The Exchange: Economic roots of Russia’s protests

9 February 2021

Police cracked down on mass demonstrations in support of Kremlin critic Alexei Navalny after his alleged poisoning and arrest. Exiled economist Sergei Guriev explains how lower real incomes, corruption and YouTube drove people to the streets – and what could happen next.

Russian mining IPO comes with sanctions noise

21 January 2021

Nord Gold is planning a $5 bln listing in London, the WSJ reports. Severstal billionaire Alexey Mordashov only has a minority stake, but his sons own most of the rest. Investors need to consider the risk that the new U.S. administration decides to take a tougher line on Moscow.

Russia’s wheat tax scrapes bottom of policy barrel

22 December 2020

Fiscal conservatism and administrative issues make it tricky for Moscow to support citizens via European-style furloughs. Its Plan B, a levy on wheat exports, is supposed to limit domestic food price inflation. But in doing so it will probably undermine a key Russian industry.

Rusal’s Deripaska discount makes partial return

21 December 2020

The aluminium group’s Hong Kong shares fell after a Bloomberg article claimed former controlling shareholder Oleg Deripaska still exerts influence. Rusal and holding company En+ deny that he does. So far, investors are not taking fright like they did in April 2018.

Funky debt bonanza is breeding complacency

8 December 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Russia is blessing and curse for e-commerce IPO

19 November 2020

Online marketplace Ozon’s New York offering values it at up to $5.6 bln. A big and underpenetrated market is a plus, as are barriers to foreign rivals. But subsidising deliveries in the world’s biggest country means it’s burning cash. The $1 bln fundraising may not be its last.

Sberbank’s rebrand puts style before substance

24 September 2020

Russia’s $67 bln lender is ditching “bank” from its name to sound more like a Big Tech group. Plans for $1 bln in 2020 non-financial digital revenue are a start, but it still has 100 mln banking clients. If the company wants its rejig to motor, it needs better transition targets.

Russian tech giant Yandex leaps into superapp race

23 September 2020

As China and the U.S. battle over access for each other’s tech groups, the $23 bln search engine is snapping up online bank Tinkoff for $5.5 bln for a pricey 4 times book value. But it adds the fintech component to CEO Arkady Volozh’s ecosystem of ride-sharing and e-commerce.

Navalny cloud may yield green energy silver lining

22 September 2020

A suspected Novichok attack on the Kremlin critic further complicates German links to Russia via the new Nord Stream 2 pipeline. For now, gas needs mean Berlin can’t bow to U.S. pressure to ditch the project. But it should add impetus to the drive for alternative energy sources.

De Beers’ rocks are in an increasingly hard place

3 September 2020

Even before Covid-19, the Anglo American-owned diamond giant’s lunch was being eaten by Russia’s Alrosa and cheaper man-made stones. De Beers still has access to Botswana’s high-quality gems. But lockdowns are blunting the edge its quirky sales method has enabled.