Vladimir Putin is the new bad weather 4 Aug 2014 The bogeyman of Ukrainian unrest is replacing snow as a reason to expect worse earnings. Just ask VW, Adidas or McDonald’s. The World Cup goes the other way, helping Adidas (again), Twitter and maybe Disney. The message could be muddled when Russia and soccer converge in 2018.
EU will find Russian sanctions worth the pain 30 Jul 2014 Europe has coordinated with the U.S. on broad new measures that will hit Russia hard. The weak EU recovery will also be hit. If the sanctions help change Moscow’s policies, the suffering will have paid off. If not, it makes sense to put Russia in financial quarantine.
Russia casts mid-sized shadow over BP 29 Jul 2014 The UK oil major’s results benefitted from strong upstream earnings, including a big contribution from its stake in Russian firm Rosneft. Sanctions and a court judgment have made Russia look less reliable, but the dividend looks safe. BP will have to rely more on self-help.
Yukos ruling casts Russia further into the cold 28 Jul 2014 The Hague’s arbitration court ordered Russia to pay $50 bln to the expropriated oil group’s former shareholders. Moscow will appeal, but could lose again. It will then have to either blow a hole in public finances or ignore the penalty – and spend years in debtors’ hell.
Russian sanctions wide of bullseye for energy firms 24 Jul 2014 U.S. measures will raise financing costs for the likes of Rosneft or Novatek, but have limited impact on their projects with Western partners. Still, the threat of tighter sanctions, including from the EU, will keep the industry on edge.
Business faces tough adjustment to post-MH17 world 21 Jul 2014 Western governments are rounding on Russia after the crash of MH17. Sanctions against the country will be toughened, regardless of business not being ready for a prolonged economic conflict. Obstinate Russian bulls should be prepared to pay the price of escalating tensions.
Potent Russian sanctions show Europe the way 17 Jul 2014 Moscow markets tanked after the U.S. agreed new, tougher economic measures against Russia over its role in Ukraine. Sanctions work. The EU should remember that when announcing its own plan in a few weeks – unless Vladimir Putin offers an olive branch by then.
Russian rally has deceptive momentum 24 Jun 2014 Moscow stocks have recouped this year’s losses as Vladimir Putin sends signals of a more conciliatory policy toward Ukraine. The annexation of Crimea is fading from investors’ memory. But Russia still has its problems, which limit its scope to outshine other emerging markets.
Gazprom/Ukraine dispute is proxy for Putin’s whims 16 Jun 2014 The Russian energy group will deliver only pre-paid gas to Ukraine, after talks on $4 bln of overdue bills collapsed. Combine that with renewed hostilities by Russian separatists in the east of the country, and markets were premature in believing that the Ukraine crisis has ended.
Dollar reserve status will survive a Moscow snub 9 Jun 2014 Some Russian firms are trying to deal in something other than dollars. Even if they manage, their quest testifies to America’s FX hegemony. Russia commodity and energy exports are usually denominated in dollars. And the proposed alternative currencies are linked to the greenback.
BRICS bank: a good idea that can do grave harm 6 Jun 2014 Brazil, Russia, India, China and South Africa are sponsoring a World Bank clone. The new lender could ease the infrastructure deficit in emerging markets, but could also end up backing social and environmental disasters. The bank’s governance will decide if it’s a boon or a bane.
Russia puts gas-hungry China in a bear hug 21 May 2014 A planned pipeline gives Russia a new market outside the increasingly frosty EU. For oil major PetroChina this should staunch losses from low regulated prices at home. China gets cheap supply, but at a cost: the optics of the deal shred Beijing’s claims of political neutrality.
SocGen sanctioned by its Russian optimism 7 May 2014 The French bank took a 525 million euro first-quarter hit on its Moscow unit. Yet the economic slowdown, weakening rouble, and potential Western sanctions aren’t shaking SocGen’s bullish take on Russia. That may be correct in the long run; right now, it looks too rose-tinted.
Rob Cox: Solving America’s homegrown Putin dilemma 6 May 2014 Critics say that Obama’s targeted economic sanctions against some Russian oligarchs smack of appeasement. Yet silence prevails when it comes to a Nevada tax scofflaw surrounded by vigilantes. If the U.S. can’t uphold the rule of law at home, it can have no credibility abroad.
Uncle Sam’s Putin sting also threatens investors 28 Apr 2014 Sanctions can cut both ways. The U.S. is targeting Rosneft boss Igor Sechin. Will Russia retaliate against BP, which owns 20 pct of the oil giant? Probably not, thanks to the British company’s approach. But all foreign business partners are subject to Putin’s wrath.
Sanctions on Russia will cost less than inaction 17 Apr 2014 European leaders blame Russia for the takeover of Ukrainian cities by armed separatists. Yet they’re refraining from further sanctions because it’s not a full-blown invasion. The wavering and waiting will only increase the final price to be paid for Vladimir Putin’s actions.
Ukrainian rate rise is a sign of desperation 15 Apr 2014 With Russia squeezing an already feeble economy, it will be tough to avoid meltdown. A steep interest rate hike can only delay woes. Since impoverished Kiev cannot count on either citizens ready for huge sacrifices or massive Western financial support, Russia has the upper hand.
U.S. stalls IMF reforms at risk of own ambitions 14 Apr 2014 Finance ministers meeting in DC blasted Congress’ refusal to back more lending power for the fund and a bigger voice for the likes of China and Brazil. Harsh words alone won’t do much. But votes against Ukraine loans and other plans would inflict a high price on foot-dragging.
Russia would pay steep price for Ukraine invasion 8 Apr 2014 The pro-Russian agitation in eastern Ukraine has rekindled fears of an intervention from Moscow. But even if Vladimir Putin is tempted, the economic implications will hopefully bring second thoughts. Any Russian invasion would spur costly sanctions and massive capital flight.
Ukraine needs gas efficiency more than imports 31 Mar 2014 Congress is debating speeding up U.S. gas exports to curb Russia’s sway over its former satellite. A cheaper solution lies closer to home. Ukraine is the world’s second most wasteful energy user. Merely matching Romania’s efficiency would slash Ukraine’s gas bill by two-thirds.