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. Last Updated: 07/27/2016

Business in Brief

UES Shares Fall 5%

Reuters

Shares in electricity monopoly Unified Energy Systems closed more than 5 percent lower Monday after the government signed off on a restructuring blueprint perceived as shareholder-unfriendly.

The share closed at $0.1098, down 5.43 percent, and traders said local speculators provoked the fall, playing on a market belief that minority stakeholders oppose the government plan.

"A few hotheads decided that's it, the government approved it and that it's bad for UES," said Andrei Kukk, head of trading at NIKoil brokerage.

"They are trying to play on the possibility that shareholders could take the results of the meeting negatively," said a trader at a Western bank.

But analysts praised the government's plan, saying it opened the way to competition on an open market and uncertainty would lift if the government disclosed how the property structure would change as the eight-year plan proceeds.

Economic Development and Trade Minister German Gref, whose plan to carve up and modernize UES won approval, said that after a year of agonized debate the government's decision was final.

"[Shareholder] concerns are real and we share them. At the same time we tend to favor Gref's plan because it lays out a framework for a real electricity market," Aton brokerage wrote in a morning comment.




Alrosa Opens in Israel

The Moscow Times

Diamond monopoly Alrosa on Tuesday was to open a representative office in the Israeli city of Ramat Gan in a move to develop the company's external contacts, Prime-Tass reported.

As for sales in Israel, "there is no talk of it, as the company in keeping with an acting trade accord with De Beers adheres to a one-channel system of diamond sales through a relevant division of the South African corporation," an Alrosa spokesman said.

The accord expires on Dec. 31, and the sides have begun talks on a new deal.

Alrosa produced $100 million worth of diamonds in 2000. This year's target output is $150 million to $170 million. The company is giving priority to the manufacture of exclusive products for sale in Russia and abroad.




CB Currency Auction

Reuters

The Central Bank will hold an auction June 4 for $50 million in hard currency to help foreigners repatriate rubles locked in special accounts since the 1998 economic crisis, the bank said Monday.

The Central Bank has organized several previous foreign exchange auctions where dollars have been snapped up by foreign investors seeking to remove funds from the so-called "S" accounts.

The accounts hold ruble proceeds from GKO treasury bills that were restructured in the wake of the 1998 crisis. The Central Bank's hard currency auctions are a favorite way for foreign investors to repatriate their funds, although there are other limited investment opportunities.




Chubais to U.S.

The Moscow Times

Unified Energy Systems chairman Anatoly Chubais on Sunday flew to the United States to meet with U.S. Vice President Dick Cheney, Interfax reported.

Chubais will hold discussions with investors and study the liberalization of the U.S. energy market. He is expected to return to Moscow on Friday.




Ruble Steady at 29.09

Reuters

The ruble was little changed in morning trade Monday as the Central Bank intervened to support it in the key exchange trade and on the interbank market, dealers said.

The ruble's weighted average for today's settlement slipped to 29.0946 per dollar in a unified session of eight exchanges after 29.0865 per dollar Friday.

Based as usual on the results of the unified session, the Central Bank left its official next-day rate unchanged at 29.09 rubles per dollar .

Banks' balances on their correspondent accounts at the Central Bank, an indicator of banks' liquidity, fell to 88.85 billion rubles Monday from 91.56 billion rubles Friday.

Dealers said the Central Bank posted a $100 million offer on the unified trade at 29.0960 rubles per dollar and sold about $20 million to $30 million. Trade volume rose to $149.08 million from a previous $110.18 million.