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. Last Updated: 07/27/2016

Business in Brief

Stock Limits Raised

MOSCOW (Reuters) -- The state securities watchdog on Friday raised the limit on foreign trade in two New York-listed Russian stocks, mobile operator Mobile TeleSystems and food group Wimm-Bill-Dann.

The move is likely to increase the amount of stock available to foreign investors in the Russian market, who face a severe shortage of investment instruments and declining free-floats in many companies -- but it may also create stock overhang.

The increase is especially important for those investors who hold the 5 percent of MTS stock that was placed as global depositary receipts a year ago by MTS's strategic investor Deutsche Telekom, which sold stock in MTS to reduce its debt.

Output Grows 8.7%

MOSCOW (Reuters) -- Industrial output grew 8.7 percent, year-on-year, in February after a 7.5 percent gain in January, the Economic Development and Trade Ministry said Friday, citing data from the State Statistics Committee.

Industrial output rose 6.5 percent in February 2003.

A ministry spokesman also said industrial output was up 8.1 percent cumulatively in the first two months of the year, compared with a 5.7 percent gain in the same period of 2003.

Belarus Deadlock

MOSCOW (Reuters) -- Gazprom said Friday that it had failed again to reach a long-term deal with neighboring Belarus on gas supplies and transit to Europe due to a pricing dispute with Minsk.

"Talks are likely to resume next week. But so far they are very difficult because Belarus is offering unacceptable conditions," Gazprom spokesman Sergei Kupriyanov said.

Gazprom stopped supplying its own gas to Belarus from January due to a pricing row, and the energy-hungry state was forced to resort to short-term gas import deals with small Russian traders.


MOSCOW (Reuters) -- The board of Unified Energy Systems decided Friday to bar new electricity consumers from the regulated bourse, forcing them toward a small exchange where power is traded at free prices.

The country has two wholesale power exchanges: FOREM, where power producers sell their excess output at state-regulated prices; and the ATS, where only 5 percent to 15 percent of the country's total power output can be traded at free prices.

The ATS is an experiment designed to prepare producers and consumers for deregulation in 2006.

The UES board also gave its chief executive power to determine the size of dividend payouts by its partially privatized subsidiaries, UES said.

Trade Surplus Down

MOSCOW (Reuters) -- The foreign trade surplus nudged lower to $5.57 billion in January from $5.59 billion in December, but rose from $4.89 billion in January 2003, the Central Bank said Friday.

Oil Exports Rise

LONDON (Reuters) -- Exports of oil products from the former Soviet Union rose in February to 2.06 million barrels per day, up 110,000 bpd from January due to milder weather, consultants Petrologistics said Friday.

"January was frozen, so exports were lower," Conrad Gerber at Petrologistics said.

Oil products exports from Black Sea, Baltic and Far East ports were also up 315,000 bpd from the same time last year.

Gas oil exports rose 15,000 bpd against January to 860,000 bpd, a nudge up from the 825,000 bpd exported in February 2003.

The extra volumes did not weigh on gas oil prices as European distillate demand was still healthy in February amid a cold snap, while refinery maintenance trimmed regional supply.

Sakhalin-2 Gas Deal

MOSCOW (Reuters) -- Royal Dutch/Shell-led Sakhalin Energy said Friday that it had signed a 23-year deal with Japanese refiner Toho Gas to supply liquefied natural gas from its Sakhalin-2 project.

The deal, for up to 0.3 million tons of LNG per year, is a further breakthrough in Sakhalin Energy's $10 billion project to build the world's biggest LNG plant on the remote island of Sakhalin by 2006.

Kyushu Electric, Tokyo Gas and Tokyo Electric Power Co. have already signed LNG deals with Sakhalin.

Irkut Cuts Share Price

MOSCOW (Reuters) -- Irkut, known worldwide for its Sukhoi combat jets, has set a lower-than-expected price range of $0.54 to $0.68 for its Moscow share offering this month, a source close to the issue said Friday.

Although the range was below expectations -- the stock traded at around $0.75 on Moscow's RTS bourse on Friday -- analysts said strong order flow from Irkut's combat jet customers in Asia should attract investors.

"[The range will be] $0.54 and $0.68," the source said by telephone during a closed-door Irkut presentation to investors where the numbers were announced.

A roadshow for the placement of 23.3 percent of Irkut's stock, up from an originally planned 20 percent, kicks off Monday, the source said.

RusAl Bids in Jamaica

MOSCOW (Reuters) -- Russian Aluminum said Friday that it had launched a bid to buy a 65 percent stake in top Jamaican producer of feed for aluminum smelting, Alpart, from Kaiser Aluminum Corp.

"Yes, we're taking part in this tender," a RusAl spokeswoman said. She declined to give details.

Alpart owns a mine of raw material bauxite and a refinery of intermediate product alumina. It produced 1.53 million tons of alumina in 2003. Roughly 2 tons of alumina are needed to produce 1 ton of aluminum.

$350M Railways Bond

MOSCOW (Reuters) -- Russian Railways Co., or RZD, plans to issue a five-year domestic bond worth between 10 billion and 12 billion rubles ($350 million-$420 million) in the autumn, company president Gennady Fadeyev said Friday.

He said he expected the bond to yield 8 percent to 8.5 percent.

ISC Interest in Russia

NEW YORK (Bloomberg) -- Wilbur Ross, chairman of International Steel Group Inc., said he will seek acquisitions outside the United States once he completes a proposed $225 million purchase of West Virginia-based Weirton Steel Corp.

A starting point, he said, may be Russia.

"Some of what the Russian companies are doing is very interesting," Ross said.

"Russia would be a logical place for us to look. Our idea was to develop strong positions in our businesses here first, and Weirton will complete that."

LUKoil's Georgia Plans

TBILISI, Georgia (Prime-Tass) -- LUKoil plans to enter Georgia's "retail market," LUKoil President Vagit Alekperov said late Thursday, ITAR-TASS reported. Alekperov was speaking after meeting with Georgian President Mikheil Saakashvili.

"We have received a positive response from the president of Georgia and this gives us more confidence to expand our business here," Alekperov told reporters.