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. Last Updated: 07/27/2016

Business in Brief

Alfa Buys Dutch Bank

The Moscow Times

Alfa Bank bought a 100 percent stake in Amsterdam Trade Bank NV for $10 million, Prime-Tass reported Alfa Bank as saying Wednesday.

Amsterdam Trade, a subsidiary of SBS-Agro in the Netherlands, is the only bank with Russian private capital in the euro zone, although Alfa Bank has affiliates in Britain and the United States.

Alfa said its presence in the Netherlands opens up new opportunities for servicing Russian-Dutch turnover, international transactions by Russian clients and their Western partners and the implementation of joint projects.

Wage Arrears Rise 1.8%

The Assocciated Press

Federal, local and regional governments have fallen behind on wage payments this year, according to official statistics released Wednesday.

Wage arrears rose 1.8 percent in January and 3.8 percent in February, reaching 33.49 billion rubles ($1.29 billion), according to the State Statistics Committee.

The government share of that sum rose 9.2 percent in February, accounting for 4.92 billion rubles, the committee said. Large private and state companies were responsible for the rest.

The government and large companies have often patched up holes in their budgets by delaying salary and pension payments. The practice had faded last year after an economic upswing caused by high oil prices for oil, and the government and companies had begun to chip away at their wage debts.

Norilsk Nickel Upgrade


Brunswick UBS Warburg said Tuesday it upgraded metals giant Norilsk Nickel to "strong buy" from "speculative buy" as the company has shown commitment to completing a restructuring plan viewed as positive.

A research note said completing restructuring would reduce corporate governance risks to the Russian average and praised Norilsk's recent initiatives of including minority shareholders on the board and adopting an improved charter.

"We therefore see Norilsk Nickel as being well placed to become one of the most pronounced corporate governance turnaround stories on the Russian market, with shareholders becoming interested in making money on equity and dividends," it said. It saw Norilsk shares as fair value at $25.5.

Svyazinvest Split


State telecoms holding Svyazinvest said Wednesday that it would propose splitting the nominal share value in several regional telecoms to improve their liquidity and ease conversion as they consolidate.

A Svyazinvest spokeswoman said the holding would propose the split at upcoming annual shareholders meetings at 11 of its subsidiaries.

The government is consolidating Svyazinvest's dozens of small regional telecoms into seven mega-regional telecoms to boost industry efficiency. The spokeswoman said lowering the nominal value of the shares would simplify their conversion as the restructure proceeded.

TNK Unit Gets $50M


TNK-Ukraine, a fully owned subsidiary of Tyumen Oil Co., or TNK, has received a $50 million loan arranged by Westdeutsche Landesbank Girozentrale, TNK said Wednesday.

The one-year revolving facility is aimed at stabilizing production at the Lisichansk, or Linos, refinery in Ukraine and is partially guaranteed by TNK, the company said in a statement.

"The package is the largest loan ever arranged for a private Ukrainian company without a sovereign guarantee," it said. TNK is carrying out an investment program to upgrade Linos over the next five years. The refinery produces more than 300,000 tons of refined products per month.

Kuchma Blasts IMF


KIEV — Ukrainian President Leonid Kuchma accused international lenders of penny-pinching in an annual report to parliament in which he identified poverty as the country's single greatest woe.

Officials in the former Soviet state have said they suspect the International Monetary Fund cut off lending to Ukraine in February due to a political crisis over the murder of a journalist rather than for strictly economic reasons.

"Cooperation, above all with the IMF, is seen as a mark of trust and creditworthiness. ... But we cannot just sit back and accept it when international financial institutions turn to penny-pinching," Kuchma said.

Officials have criticized the IMF for what they say is a constant moving of goalposts in order to be given a clean bill of health.

But foreign investors say they are worried by widespread corruption in Ukraine and unclear business legislation.

Kuchma's lengthy report, sent from the Black Sea Crimean peninsula where the embattled leader is resting, avoided direct comment on the crisis sparked by the murder of reporter Georgy Gongadze last year, but pledged to uphold freedom of speech.

The discovery of Gongadze's headless corpse in a shallow grave outside Kiev and publication of tapes on which a voice similar to Kuchma's gives orders to kidnap the journalist have led to thousands-strong protests in the capital, Kiev.

World Bank to Invest $10M


The World Bank plans to invest from $2 million to $10 million in a Russian insurance company, the bank said Tuesday.

Specialists at the World Bank and a subsidiary, the International Finance Corp., have been conducting negotiations with various companies, but they have not yet decided who will get the loan. The IFC will act as investor once the selection is made.

"We would like it to be a private company that is not owned by one of the large holdings and in which there is very little or no state participation," said Yevgeny Gurenko, World Bank specialist for insurance. The plan will involve a portfolio investment or the provision of technical assistance, Gurenko said.

MT Index Falls 2.03%


Russian shares swung down Wednesday taking their cue from the U.S. and European markets' disappointment with a U.S. rate cut, though selling was relatively slim in a volatile market, traders said.

The dollar-denominated Moscow Times Index of 50 leading shares closed down 2.03 percent at 144.62 on volume of $16.6 million. The Russian trading system closed off 2.21 percent at 175.72 on thin volumes of $14.7 million. Bellwether Unified Energy Systems closed down 3.64 percent at $0.1031.

Martin Diggle, a director at Brunswick UBS Warburg, said the market was "responding predictably" to the latest falls on the Nasdaq after the U.S. Federal Reserve cut its key federal funds rate by half a percentage point instead of the .75 points some had hoped for. "It's a similar situation to what it has been on other days this year when there has been bad news … but there hasn't been much client selling," Diggle said.