Russia

UK’s tough-guy act on Russia can only go so far

21 May 2018READY SOON

Britain’s delay over the renewal of Roman Abramovich’s visa comes against the backdrop of a wider clampdown on Russian oligarchs. Its sanctions on Moscow, however, contain holes. Closing them requires EU support and a readiness for the City to lose out in the crossfire.

Qatar’s Rosneft stake is pricey insurance policy

5 May 2018

The Gulf state will take back 14 pct of the Russian state oil group after a $9 bln sale to China’s CEFC collapsed. That helps Qatar-backed Glencore keep a supply agreement with Rosneft. Firmer links with Moscow also give Saudi Arabia another reason to ease up on Doha.

Deripaska’s sanctions sale may have silver lining

27 April 2018

The Russian oligarch plans to reduce his stake in power and aluminium group En+ below 50 pct, after heat from U.S. sanctions. That risks locking in losses on shares that have halved since April 5. Still, if restrictions are eased, his remaining holding should recover.

U.S. sanctions rethink is only partly reassuring

24 April 2018

A Treasury decision to delay the effects of sanctions on Rusal and allow it to disentangle itself from Oleg Deripaska has boosted the shares of the Russian group. But it leaves U.S. policy harder to gauge. That doesn’t augur well for next month’s crunch decision on Iran.

Russia’s banks could once more be its airbag

16 April 2018

The Kremlin has already authorised short-term liquidity to metals group Rusal. If the U.S. sanctions net gets cast wider, Moscow could use its control of the big Russian banks to prop up stricken companies. After all, that’s what it did when things last got dicey in 2014.

Review: America’s founding was all about the money

13 April 2018

“New World, Inc.” explores the role of British merchant adventurers in laying the groundwork for the colonial settlements in Virginia and Plymouth. The book is a prequel of sorts to the Pilgrim creation myth that suggests Mammon, not religious freedom, drove America's creation.

Opacity makes U.S. sanctions on Russia more potent

11 April 2018

Rusal aluminium will be barred from London’s Metal Exchange, and the Russian group and parent En+ will be deleted from some stock indices. In theory, non-Americans should be able to deal with both. But fear of how rules will be enforced is compounding the pain of tough sanctions.

Hadas: Even Trump can’t make graft great again

11 April 2018

Resistance to corruption is evident in cases against ex-leaders of South Korea, Brazil and South Africa. Old royal privileges make no sense in modern economies. U.S. officials and the corporate elite have strayed, but rising middle classes will keep straightening out the crooked.

Glencore’s Rusal cloud has a silver lining

9 April 2018

The commodity trader is nursing a hit to its 9 percent stake in the Russian miner, whose shares have halved due to U.S. sanctions. But the loss is bearable and disruption to the aluminium market and growing protectionism may end up helping CEO Ivan Glasenberg’s trading business.

Russian stocks deliver sanctions face-palm moment

6 April 2018

The U.S. sanctioned Rusal and EN+, as well as related oligarchs like Oleg Deripaska. The danger that groups close to the Kremlin might get burned was pretty clear in EN+’s recent IPO prospectus. Governance and politics are as critical to such companies’ value as their operations.

Telegram sends warning to Wall St and Sand Hill Rd

3 April 2018

Russian entrepreneur Pavel Durov’s messaging service raised $1.7 bln from private sales of its crypto-currency this year, besting all but three IPOs. Booming coin offerings face more oversight and many ring hollow. But Durov’s tech chops should give bankers and VC firms pause.

UK’s best Russian riposte is hiding in plain sight

14 March 2018

Prime Minister Theresa May is expelling diplomats after Moscow ignored her ultimatum to explain its role in a nerve-agent attack in England. That is a fairly ineffective punishment. Better to use existing UK anti-corruption laws to target high-profile Russians with Kremlin links.

Exxon is running out of convenient excuses

1 March 2018

The $320 bln oil giant is ending its Rosneft partnership, blaming U.S. sanctions. CEO Darren Woods hopes investing $50 bln stateside will charm investors. But they’re concerned about returns and climate change. Exxon’s 10 pct stock drop this year suggests Woods is striking out.

Stability the only threat to Sberbank’s dominance

28 February 2018

Russia’s biggest bank reported a 24 pct return on equity in 2017. A financial crisis and looser central bank allowed the state-controlled lender to cut deposit rates. Sberbank’s pricing power means it it trades at a chunky 1.7 times book value. But fat margins may face a squeeze.

OPEC’s widened tent would still be built on sand

16 February 2018

Oil-exporting countries are working to expand their alliance with Russia and others longer term, the UAE oil minister says. That’s just as production numbers show U.S. drillers are set to pump more oil this year. OPEC’s tent can widen, but it will still face a production gale.

Russia’s $2.5 bln Magnit sale is governance downer

16 February 2018

Founder Sergey Galitskiy is selling most of his 32 pct stake in the supermarket and vacating his role as CEO. While the company has struggled, his interests and those of minority shareholders were aligned. With state bank VTB stepping in, incentives could become more complicated.

Sberbank’s homeward pivot is a no-brainer

30 January 2018

The Russian bank is in talks to offload its majority stake in Denizbank. Sanctions had already taken the shine off Sberbank’s expansion abroad. But selling the Turkish lender at its $3.2 bln book value would bolster capital and help it become even more dominant in Russia.

Oil bulls look to Trump rather than Iran protests

4 January 2018

A tightening global balance of supply and demand for crude means geopolitical shocks could push up prices. Anti-government protests in Iran seem unlikely to disrupt production. A looming U.S. decision on whether to revisit sanctions could have a bigger impact.

BASF’s odd oil deal may create a valuable compound

8 December 2017

The 87 bln euro German chemicals firm agreed to merge its oil unit with Russian billionaire Mikhail Fridman’s DEA. It’s a complex transaction, with a messy structure. Yet pooling the business will create savings and may eventually help BASF shed its huge conglomerate discount.

Saudi needs OPEC cuts to work, but not too well

30 November 2017

The oil cartel agreed to extend cuts until the end of 2018. Its moderation has drained inventories and lifted prices. Further cuts won’t boost prices enough to balance Saudi’s budget. Then again, that gives the crown prince a reason to continue with his challenging reforms.