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. Last Updated: 07/27/2016

Business in Brief

9% Industry Growth

The Associated Press

Industrial production grew 9 percent in 2000, the State Statistics Committee reported Friday, a welcome boost after years of decline, but slightly lower than forecast.

Industrial production grew at an impressive pace in the first part of the year but the growth slowed as the year waned. Earlier projections had been for 10 percent annual growth.

The largest boost was in light industry, up 22 percent from 1999, followed by the medical, metallurgy and chemical industries, the statistics committee said, Interfax reported.

Industrial production lagged or declined through much of the 1990s, but enjoyed a boost after the 1998 collapse of the ruble made imports prohibitively expensive for most Russians, boosting domestic producers.

$12.4Bln in VAT

The Moscow Times

The collection of value-added taxes last year amounted to 353 billion rubles ($12.4 billion) — 126 billion rubles more than was collected in 1999, Prime-Tass reported First Deputy Tax Minister Vladimir Gusev as saying Friday.

The amount of VAT actually paid to the federal budget during the same period was just 269 billion rubles, compared with 162 billion the year before, Gusev said.

Gusev said the difference in the collection figures and the amount actually paid into the budget was due to VAT refunds.

Uralmash ADRs

The Moscow Times

No. 1 machinery producer Uralmash-Izhora holding company has been given the green light by the U.S. Securities and Exchange Commissions to issue level-one American Depositary Receipts, Prime-Tass quoted company head Kakha Bendukidze as saying Friday.

The conversion of Uralmash-Izhora shares into ADR-1 shares is the company's second entry on international markets. The SEC earlier gave the go-ahead for the company's ADR issue currently trading on German exchanges in Munich, Berlin and Stuttgart, as well as the NEWEX and OTC markets, Prime-Tass reported.

Uralmash-Izhora, formerly known as Uralmash Zavody, currently makes everything from torpedoes to sausages. It accounts for roughly 60 percent of all the heavy machinery produced in the country, mainly in the oil, mining, drilling, energy and shipbuilding industries.

WTO Bid Backed

The Moscow Times

U.S. President George W. Bush's administration should give priority to Russia's bid to join the World Trade Organization, Prime-Tass quoted outgoing U.S. Trade Representative Charlene Barshefsky as saying Friday.

In her farewell speech in Washington, Barshefsky said that the new U.S. administration should concentrate on Russia's accession to the WTO, much like the previous Democratic administration gave priority attention to China's bid, the news agency reported.

Barshefsky also encouraged President Vladimir Putin to personally make political initiatives to the WTO, Prime-Tass said.

Alfa Eyes EU Bank

The Moscow Times

Powerful Alfa Group heads Mikhail Fridman and Pyotr Aven left bankers puzzled last week after announcing that Alfa Bank was negotiating the purchase of a bank in the European Union for a mere $10 million, Vedomosti reported Friday.

"You can get something respectable for $50 million to $100 million, but for that kind of money you're looking at either something very small or 'deceased,'" said Mikhail Kuzovlev, deputy president of Probiznesbank. Alfa Bank could be thinking about working in the private banking sector, he added.

The business daily suggested that the bank under consideration may be registered in Europe, but belong to Russian structures. The Central Bank valued its stake in its Luxembourg subsidiary in EastWest United Bank at $15 million last year — a figure approaching that of the Alfa Bank proposal.

French Bank Plans


The Central Bank and Natexis Banques Populaires — France's former foreign trade bank — have signed a protocol for the creation of an NBP subsidiary in Moscow, the Central Bank said last week.

Currently 22 banks with 100 percent foreign capital operate in Russia, three of which are French.

NBP's head office and its Moscow representative office declined to comment.

The new bank is to be established over the next year and its charter capital has yet to be determined.

The bank's activities will be universal. Until 1984 the French Bank of Foreign Trade operated as a kind of French export-import bank, occupying 136th place internationally in terms of its assets. After its privatization in 1995 it was bought by Credit Nationale. In 1997 it opened a rep office in Moscow and last year was taken over by NBP.

Market Gains 2.4%


Shares clung precariously to the day's gains until the close Friday as utilities shares settled down after a morning rally, and blue chip LUKoil descended into negative territory.

The dollar-denominated Moscow Times Index of 50 leading stocks rose 2.38 percent to 23.281 on turnover of $139.30 million.

The key RTS index closed up 2.32 percent to 171.996 on volumes of $23.45 million. The broader Reuters Russian Composite was up 2.19 percent to 1,395.30.

Pavel Naumenko, head of sales and trading at Renaissance Capital, said that after nearly two weeks of gains, punctuated only by a small correction on Thursday, the market had over-reached itself.

LUKoil closed down 2.19 percent at $11.170, while fellow oil firms Surgutneftegaz closed up 3.69 percent to $0.2530 and Tatneft rose 1.45 percent to $0.4535.

Utilities saw the day's biggest gains. Moscow electric company Mosenergo closed up 4.68 percent at $0.0291, and national power grid Unified Energy Systems rose 5.85 percent to $0.0995.