The Exchange: Economic roots of Russia’s protests 9 Feb 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 Jan 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 Dec 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 Dec 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 Dec 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 Nov 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 Sep 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 Sep 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 Sep 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 Sep 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 Sep 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 Aug 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 Jul 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 Jul 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 Jul 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 Jul 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 Jun 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 Jun 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.
Norilsk Nickel hits investors when they’re down 11 Jun 2020 The miner’s biggest shareholder Vladimir Potanin wants to cap 2020 dividends at 25% of forecasts. ESG-conscious foreign investors will have blanched after it leaked 21,000 tonnes of fuel. They’ll be even less keen on cutting payouts by a lot more than the apparent cleanup costs.
Battle for Russia’s Amazon crown is heating up 5 Jun 2020 The country’s biggest lender Sberbank may buy a 30% stake in online marketplace Ozon after untangling itself from rival Yandex. The deal could value it at more than $2 bln. There’s room for both players in a market enjoying a Covid-19 boost, but the usual political caveats apply.