Russia

U.S. might quite like a China deal for En+

9 September 2019

State firms linked to Beijing may buy Russian VTB’s stake in the energy group. Washington, which attached strict conditions to the de-sanctioning of Rusal’s parent, wouldn’t love a Russia-China sale. But it could at least help distance still-sanctioned Oleg Deripaska from En+.

Russian oil group’s cash gusher could stay capped

5 September 2019

Surgutneftegaz shares have surged on reports of a new subsidiary, which may unlock its $50 bln cash pile. Yet the boss of the secretive $24 bln energy company is under U.S. sanctions and it’s at risk of fresh ones. The bonanza could just remain a buffer against bad news.

Russia’s En+ swaps one U.S. headache for another

16 August 2019

The Rusal holding company escaped punitive Washington sanctions in the first half. But Donald Trump’s trade war pummelled aluminium prices, leading to a sharp drop in EBITDA. Investors face a long wait to get anywhere near their 2017 IPO price.

Google can battle some authoritarian states

13 August 2019

Russia’s regulator is pressuring YouTube to remove invites to anti-government protests. Luckily for the tech giant, capacity building for extreme censorship takes a while. Unlike in China, Moscow’s muscle is capped by shortcomings in technology and risk of political blowback.

Review: Fighting the second Cold War, lab by lab

26 July 2019

U.S. scientific power is a potent diplomatic weapon. Greg Whitesides's new book details how Washington used research largesse to reward friends and punish the Soviet Union. Now a similar conflict is brewing with China, a more formidable rival. This time, there can be no winner.

Aging app kerfuffle shows fun trumps privacy

18 July 2019

Consumers love FaceApp’s filter for making selfies look older or sexier. Its Russian ownership has suddenly sparked privacy worries. Yet the app isn’t new, and people have been posting their images on social media for years. It’s past time for regulators to set some boundaries.

Review: The struggle of Russia’s crony capitalists

12 July 2019

Anders Aslund’s new book explains how President Vladimir Putin’s old friends and colleagues grabbed control of Russia’s economic system. He’s hazier on what might happen next. The economy looks stable but who owns what may change. Oligarchs cannot afford to rest on their laurels.

OPEC extends its awkward holding pattern

1 July 2019

The oil-producing group and allies like Russia can probably gee up prices a little by prolonging output cuts brought in last year. Gulf tensions should offset a demand-led hit to prices. But they will also make big contracts like Exxon’s $53 bln one in Iraq harder to close.

Sanctions victims compare scars in St Petersburg

7 June 2019

Vladimir Putin is casting his annual economic forum as a haven for countries and companies targeted by the U.S. government. Chinese President Xi Jinping’s attendance is a coup. But any broader alliance between the targets of Washington’s displeasure remains in its infancy.

Gazprom payout pledge yet to catch fire

31 May 2019

After a management shake-up, the $78 bln gas company says it will pay out half its net income in dividends in coming years. That would please the state, which has been pushing the issue. But the implied dividend yield of 15% suggests investors doubt the bonanza will happen.

En+ chair gets relatively meagre sanctions bonus

2 May 2019

The Russian energy group has given Chairman Greg Barker $4 mln for successfully lobbying against U.S. sanctions, Bloomberg says. En+’s market value is up $1.5 bln since it avoided the strictures. Paying 0.3 pct to detoxify its business is a reasonable exchange.

Oligarchs take U.S. sanctions risk in their stride

8 April 2019

The Russian owners of Evraz recently cut their stake below 50 pct, which offsets potential heat over their Kremlin links. That doesn’t mean fellow metal groups like Severstal need to follow suit. Still, Oleg Deripaska’s recent travails imply little cause for complacency.

Magnit’s Lenta counterpunch has yet to connect

5 April 2019

The Russian retailer has lobbed in a rival bid for its domestic rival. Magnit’s approach is fuzzy and barely more generous than oligarch Alexey Mordashov’s swoop for a 42 pct stake in Lenta. But it might prompt minority investors to think twice about which offer they back.

TPG leaves Russian retail with a whimper

2 April 2019

A decade after first investing, the buyout group is to sell its stake in retailer Lenta to tycoon Alexey Mordashov at an implied valuation of $1.7 bln. A 12 pct return is decent enough, but still below what TPG might have hoped for.

Oligarch’s Spanish bid is lesser of two evils

19 March 2019

A takeover by Mikhail Fridman’s LetterOne could leave investors in DIA with heavy losses. But supporting the management means backing a $680 mln rights issue – almost twice the supermarket’s market value. After accounting problems and profit warnings, the former looks preferable.

Arrests give investors new reason to avoid Russia

26 February 2019

Sanctions imposed on some well-connected oligarchs have already spooked foreign money managers. The detention of Baring Vostok executives including founder Michael Calvey highlights domestic dangers. Less capital will be willing to navigate the risks.

Cox: Impeachment hedge runs through Saudi Arabia

21 February 2019

As the U.S. special counsel’s work wraps up, investors are pondering how a move by Congress to oust President Donald Trump would affect financial markets. One of the more intriguing ideas is a hedge against the knock-on effect of impeachment on the Saudi-dominated oil market.

Thruppence: Who wins by sponsoring UK book prize?

29 January 2019

Man Group has ended its support for the UK’s prestigious Booker award. The hedge fund decided there were worthier recipients of its 1.6 mln pound annual cheque. Luckily for aspiring authors, Breakingviews columnists have a handy shortlist of those who could step into the breach.

Deripaska markdown will persist at En+ and Rusal

28 January 2019

The Russian metals groups have been freed from U.S. sanctions. Though their shares have perked up, they still trade below pre-sanctions level. Given the risk of new penalties should previous majority owner Oleg Deripaska exercise control, the valuation gap will linger.

Oleg Deripaska’s En+ deal is more sour than sweet

23 January 2019

The settlement that distanced the Russian oligarch from his power company has favourable aspects, the New York Times says. Certain provisions could even limit the financial hit from U.S. sanctions still in place against him. The overall outcome is, however, still pretty painful.