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. Last Updated: 07/27/2016

Business in Brief

'Sign or Forget It'

MOSCOW (AP) -- A dispute between Russia and Belarus intensified Wednesday, with Prime Minister Mikhail Kasyanov saying Belarussian demands had prevented the Slavic neighbors from reaching an agreement on plans to introduce the Russian ruble as the single currency in both nations.

Kasyanov said officials had failed to agree on the terms of a deal during meetings and that there may not be enough time to introduce the single currency by Jan. 1, 2005, as planned, Interfax reported.

"If the agreement on a single currency is not signed and ratified by the end of the year, you can forget about Jan. 1, 2005, as the date for its introduction," Interfax quoted Kasyanov as saying.

$159Bln External Debt

MOSCOW (Reuters) -- The country's external debt rose to $159.1 billion at the end of June from $154.4 billion at the end of the first quarter of 2003, the Central Bank said Wednesday.

The data is presented at face value and calculated according to international methodology, the bank said in a statement released on its web site,

Nizhny Bailout

MOSCOW (Reuters) -- The Finance Ministry will extend a credit to the Nizhny Novgorod region to help it meet a eurobond repayment due later this week, Deputy Finance Minister Bella Zlatkis said Wednesday.

The Nizhny Novgorod region, located on the Volga, issued a $100 million eurobond in 1997 at 8.75 percent. But in 1999 the region stopped servicing the debt and restructured the paper.

Under the restructuring plan, Nizhny paid interest on April 3 and Oct. 3.

"The problem will be successfully resolved in the next two to three days. There will be no default on Nizhny Novgorod eurobonds," Zlatkis told an investment conference.

In 2002, Nizhny paid 50 percent of the interest with capitalized debt. Between 2003 and 2005 the region must pay full interest, debt principal and overdue interest

Manufacturing Slowing

MOSCOW (Reuters) -- Manufacturing enjoyed an eighth month of expansion in September thanks to brisk domestic demand, but the pace of growth slowed for the second month running, Moscow Narodny Bank said Wednesday.

"Although signaling a further slowdown, growth nevertheless remains solid and well above the average for 2002 and rates recorded at the start of 2003," MNB said in a statement.

The Manufacturing Purchasing Managers' Index, or PMI, based on a monthly poll of 300 purchasing managers, fell to a seasonally adjusted 53.1 in September, its lowest reading since April.

In August the index, designed to give a snapshot of manufacturing conditions, stood at 53.7. A reading above 50 indicates expansion, below 50 indicates contraction in the sector on the previous month.

September's data suggested a further growth of production and new orders but at slower rates than recorded in preceding months, the bank said.

Dollar Appetite Wanes

MOSCOW (Reuters) -- The ruble extended its gains against the U.S. currency on Wednesday as banks opted to close their long positions as hopes for sharp dollar gains at the start of October failed to materialize.

The ruble for today delivery firmed to a weighted average of 30.5610 per dollar from 30.5914 Tuesday but still traded below levels seen at the start of the week when the ruble tested 10-day lows despite strong fundamentals.

"The main sentiment on the market is disappointment in long dollar positions as people realized that there will be no sharp dollar gains at the start of October," said Sergei Shchepilov at Raiffeisen Bank in Moscow.

Traditionally the ruble slips at the start of the month when liquidity improves after banks and companies complete their tax payments and declining ruble rates turn the dollar into a more attractive investment option.

Gazprom Plugs Leaks

MOSCOW (Reuters) -- Germany's Ruhrgas and Gazprom said Wednesday that they were stepping up cooperation on curbing leaks from Russian gas pipelines, aiming to save huge amounts of energy and protect the environment.

The companies said they would broaden cooperation on limiting emissions from the 7,500-kilometer Volgotransgaz pipeline network and thereby reduce the annual amount of energy needed to pump gas along the link by 1.5 billion kilowatt hours.

Aided by satellite monitoring of pipelines and better compression, the Volgotransgaz scheme would also cut emission of carbon dioxide by 450,000 metric tons per year.

Carbon dioxide is a nontoxic gas emitted by burning fossil fuels, from sources such as factories and cars, and is blamed by scientists for blanketing the planet and driving up temperatures.

Fuel Exports to Drop

SINGAPORE (Reuters) -- Higher winter export tariffs on Russian fuel oil that go into effect from Monday should halve exports from Far East ports and benefit sellers based in Singapore and South Korea, traders said Wednesday.

Each year, Moscow sets an export tariff to ensure ample domestic winter inventories for heating, a Russian trader said.

As a result of the tariff, he said he would expect his normal sales to decline to the Chinese ports of Huangpu, Shanghai and Tianjin.

Last year the export tariff was about $25 per metric ton and this year it is expected to be at least as high, he said.

"The problem now is that Russian domestic prices are high as we head into winter and the tariff adds costs to us sellers on top, so there's less export incentive," he said.

S&P Upgrades Tatneft

LONDON (Reuters) -- Standard & Poor's said Wednesday that it raised its long-term corporate credit rating on oil company Tatneft to "B" from "B-" following the improving financial profile of Tatarstan and Tatneft's gradual debt reduction.

S&P said the outlook is stable.

The long-term foreign currency issuer credit rating on Tatarstan was raised to "B-" from "CCC+" on Sept. 22, and, along with the improving operating environment in Russia and the gradual reduction in Tatneft's debt, this has led to an improvement in the credit profile of the company.

"Tatarstan's improving budgetary performance and low debt burden have helped reduce the republic's immediate need for Tatneft's financial support," Standard & Poor's credit analyst Yelena Anankina said.

"The rating on Tatneft continues to be constrained, however, by the close and nontransparent influence of the republic, as well as the company's below-average profitability, low downstream integration and weak liquidity position," she said.

Argentine Airport?

MOSCOW (MT) -- The Aeropuertos Argentina 2000 consortium, which manages Yerevan's Zvarnots Airport, is planning to participate in a tender on managing Sheremetyevo's Terminal 1 in Moscow, RIA Novosti said Wednesday.

The owner of a controlling stake in the consortium is Argentine businessman Eduardo Ernekyan.

A source close to Ernekyan said the businessman, whose consortium manages 33 airports in Argentina, Mexico, Uruguay and Armenia, is negotiating the issue with top Russian officials, the Arminfo news agency reported, according to RIA Novosti.


MOSCOW (Reuters) -- No. 1 cellphone network operator Mobile TeleSystems said Wednesday that it has applied to list its shares on Moscow's MICEX exchange.

A local listing would help make MTS Global Depositary Receipts, placed with investors by strategic partner Deutsche Telekom when it sold part of its stake to reduce debt, tradable on the New York Stock Exchange.

"We are counting on a natural flow between ADRs, GDRs, ordinaries and back. We have no plans to issue additional equity and sell it to the market," said Andrei Braginsky, MTS head of investor relations. "This is the first step to provide for conversion of GDRs into ADRs."

According to Russian securities trade rules, a domestic company must have a listing in its own country as one requirement for newly placed stock to circulate on a foreign exchange.

MTS placed American Depositary Receipts on the New York Stock Exchange in its initial public offering in mid-2000, before that rule was introduced.