Russia

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.

Russian conglomerate finds discount hard to shake

3 September 2020

Sistema wants to put a value on resilient companies such as online retailer Ozon and wood pulp maker Segezha. That’s logical: the $2.7 bln group trades at a hefty discount to its investments. But its oligarch owner, poor governance and sanctions noise are lasting burdens.

Kremlin foe’s illness benefits Russian kleptocrats

21 August 2020

Allies of Alexei Navalny say the politician-investigator has been poisoned. In a country with few independent voices, his damaging exposés of leading figures’ corruption and cronyism have been popular - and embarrassing. Any would-be emulators are now likely to be more cautious.

All sides could gain from $42 bln NorNickel reset

28 July 2020

An agreed management shakeup would protect the role of CEO Vladimir Potanin, who holds 35% in the Russian miner, and dodge legal disruption. Rusal, with 28%, could eke out more control. Other investors would get a better-run company, and a lower risk of ecological catastrophe.

UK rules need more bite to combat Russia influence

21 July 2020

Welcoming Russian money without many checks was counterproductive, a parliamentary report said. Attempts made so far to tackle the issue don’t go far enough. Investing more in regulatory and crime-fighting bodies and asking tougher questions about the source of wealth may help.

OPEC maintains illusion of control over oil price

15 July 2020

The producer group and allies stuck to plans to hike output, after coordinating a huge cut in April. While that will soothe jittery oil traders, a second virus wave would ruin the calm. And the more prices rise, the harder it will be to stop members pumping what they like.

Norilsk Nickel underlines funds’ ESG blind spot

2 July 2020

The Russian miner had a bad pollution record even before it leaked 21,000 tonnes of fuel in the Arctic Circle. Passive investors like BlackRock have pledged to engage more closely with ESG miscreants. But when the company is controlled by oligarchs, they may just be ignored.

Review: Russian capitalism binds “Putin’s People”

26 June 2020

The president’s murky networks blur the line between public, private and criminal cash, Catherine Belton writes. Tycoons must obey the omnipresent Kremlin to survive. Half of ordinary Russians do the same: They rely on the system for work. It helps explain Putin’s survival.

Yandex picks good time to untangle from Sberbank

24 June 2020

The Russian search engine will pay $600 mln for the bank’s stake in their e-commerce tie-up and exit their payments unit. With shares up, funding this with $800 mln from investors like Roman Abramovich makes sense. Sadly, immunity from Kremlin meddling isn’t part of the deal.