Russia 090423 Basic Political Developments

Business, Energy or Environmental regulations or discussions

'Climate Doctrine' Outlined

http://www.themoscowtimes.com/article/1009/42/376519.htm

23 April 2009

By Anatoly Medetsky / The Moscow Times

The Natural Resources and Environment Ministry wants to see steeper penalties for environmental violations as part of a "climate doctrine" that it composed, a policy paper predicting that parts of Russia may go underwater after 2025, Minister Yury Trutnev said Wednesday.

The Presidium, a scaled-down version of the Cabinet, is scheduled to consider the doctrine Thursday.

Fines for air pollution may increase up to twentyfold, Trutnev said at a news conference. Fines for some other types of pollution could increase fivefold to fifteenfold, he said.

The document also addresses why the climate is changing and contains forecasts about the effects of global warming and ways to adapt to the changes, Trutnev said. The document is intended to be a reference for other ministries and agencies, he said.

Even if carbon emissions were to stop immediately, air temperature would continue rising through 2050, Trutnev said.

"The economy will develop in different climatic conditions in the future," he said. "That's why climate changes need to be taken into account."

Global warming, caused by higher levels of carbon dioxide in the atmosphere, may lead to rising sea levels and flooding, including in Russia from 2025 to 2050, Trutnev said, citing the doctrine. The negative effects would also include more droughts and forest fires.

On the upside, Russia would gain farmland, be able to generate more electricity at its hydropower stations and enjoy easier access to the Arctic shelf.

Trutnev also said the government should not reject the idea of auctions for licenses to develop natural resources in favor of the less transparent competitions, even if companies are currently too cash-strapped for vigorous bidding.

The Federal Subsoil Resources Use Agency was able to hold only 10 percent of the planned auctions in the first quarter of this year because potential bidders showed little interest.

Russian Stocks Decline, Paced by Severstal, Rosneft; VTB Gains

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRiw7Nw48cTw

By Bradley Cook

April 23 (Bloomberg) -- Russia’s Micex Index fell for the third time this week, led by steelmaker OAO Severstal and oil producer OAO Rosneft. VTB Group advanced.

The 30-stock Micex slid 0.2 percent to 903.12 at 10:54 a.m. in Moscow. The ruble-denominated benchmark is up 0.6 percent this week, heading for its eighth weekly gain in a row. The dollar-denominated RTS Index increased 1.6 percent to 797.86.

Severstal declined 1 ruble, or 0.7 percent, to 146.95 rubles after Bank of America Corp. rated the billionaire Alexei Mordashov’s steel company “underperform” in renewed coverage.

Rosneft, Russia’s biggest oil company, fell 1.95 rubles, or 1.1 percent, to 171.96 rubles, tracking crude prices lower. Crude oil for June delivery slid as much as 48 cents, or 1 percent, to $48.37 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

VTB, the country’s second-biggest bank, advanced 2.1 percent to 3.38 kopeks after posting a net loss in the fourth quarter that was less than analysts estimated. The state-run lender lost $104 million, versus the $225 million median estimate in a Bloomberg survey of eight analysts.

OAO Sberbank, VTB’s bigger rival, gained 9 kopeks, or 0.3 percent, to 27.39 rubles. A kopek is a hundredth of a ruble.

To contact the reporter on this story: Bradley Cook in Moscow at [e-mail].

Last Updated: April 23, 2009 03:04 EDT

Russian eurobond segment weaker

http://businessneweurope.eu/users/subs.php

Rencap, Russia

Wednesday, April 22, 2009

On the back of a global correction, the Russian eurobond market has been feeling selling pressure as well. By the end of yesterday (21 Apr), prices for most instruments were down by one bid-to-offer spread. For sovereign bonds, this corresponds with half a figure down, with the benchmark Russia-30 closing at 97.375. Russian five-year CDSs widened 18 bpts yesterday, to 385 bpts. Prices for Gazprom, TNK-BP, VimpelCom all dropped 2 ppts. In the metals and mining segment, prices were almost 3 ppts weaker. Gazprom 19, which was recently placed at par, closed at 98.375.

Buy or sell?

Volatility on the Russian eurobond market remains high. After quite a long rally, we regard yesterday's wave of profittaking as a rather natural market trend. However, we still consider the Russian eurobond market relatively cheap compared with its emerging markets peers. Yields for VimpelCom bonds at 16.0%, or the 18-20% yields in the metals and mining segment, still look highly attractive to us. Besides, even after the recent Gazprom placement, we do not think the risk of new supply in the Russian eurobond market is a concern. For most Russian domestic borrowers, rates are still too high to economically justify any new public borrowings. We think that in order for them to return to the primary market, yields should fall another 300-500 bpts. At the same time we see little risk of another massive sell-off in the Russian eurobond market in the coming months. The biggest drop of eurobond prices in Oct-Nov 2008 was mainly triggered by western hedge-fund liquidations, and this process is now almost complete. We think the chance of such a situation repeating itself is fairly low in the coming months. Hence, currently the downside risk in the Russian eurobond market is significantly lower compared with its upside opportunities, in our view. We suggest investors use the current market weakness as an opportunity to add relatively cheap bonds to their portfolios.

Nikolay Podguzov

UPDATE 1-Russian bank VTB's year profit beats forecasts

http://www.reuters.com/article/rbssBanks/idUSLN30336520090423
Thu Apr 23, 2009 2:57am EDT

* 2008 net profit $212 million vs $1.5 billion in 2007

* Provisioning charge 3.2 pct, up from 1.3 percent in 2007

* Provisions soar by $1.1 billion in Q4

(Adds further details)

By Melissa Akin

MOSCOW, April 23 (Reuters) - VTB (VTBR.MM: Quote, Profile, Research, Stock Buzz), Russia's second-largest bank, made a net profit last year of $212 million, it said on Thursday, defying expectations of a loss although provisions soared in the last quarter as the economy began to contract.

Analysts' forecasts for full-year net income varied widely, from a $150 million loss to a $33 million profit, because of uncertainty over provisions and trading losses. Most analysts expected a small full-year loss.

The state-controlled bank made a net profit in 2007 of $1.5 billion.

In 2008 provisioning for bad loans soared by $1.1 billion in the final quarter of the year from $1.4 billion in the first nine months of the year.

Total provisions rose to 3.2 percent of the average gross loan portfolio from 1.3 percent in 2007 and 2.5 percent for the first nine months of 2008.

VTB has already restructured 15 percent of its loan portfolio and sees "problem debt" at around the 7 percent mark, the bank's head, Andrei Kostin, was quoted as saying this week.

The bank reiterated on Thursday that provisions for bad loans would not exceed 8 percent of the portfolio this year and said revenue growth would be in the mid-teens in dollar terms this year. (Editing by Greg Mahlich)

VTB Posts $104 Million Fourth-Quarter Loss, Less Than Expected http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_zCtcbVPnaE

By Denis Maternovsky

April 23 (Bloomberg) -- VTB Group, Russia’s second-biggest bank, had a fourth-quarter loss of $104 million, based on Bloomberg calculations of the 2008 results published by the company today.

That’s better than the $225 million net loss median estimate of eight analysts in a Bloomberg News survey.

To contact the reporter on this story: Denis Maternovsky in Moscow at [e-mail]

Last Updated: April 23, 2009 02:22 EDT