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. Last Updated: 07/27/2016

Business in Brief

$7Bln Capital Outflow?

Central Bank First Deputy Chairman Alexei Ulyukayev said Monday that he expected this year's capital outflow to range between $5 billion and $7 billion.

"It's slightly less than last year," he told a news conference, referring to the 2004 capital outflow figure of $9.4 billion. That also compares with a forecast of at least $3 billion, which he made in late April. (Reuters)

Currency Basket

The Central Bank does not plan to change the structure of its gold and foreign exchange reserves because of a recent fall in the euro, the bank's first deputy chairman, Alexei Ulyukayev, said Monday.

"We will not react to short-term factors. Of course we'll keep euros in reserves. Europe is one of our most important partners," he told a news conference.

The Central Bank's reserves, worth nearly $150 billion, are the largest outside Asia. (Reuters)

GDP Grew 5.2% in Q1

The economy grew an annual 5.2 percent in the first three months of the year, the slowest rate in almost three years, as oil production sputtered and investment declined.

The increase in gross domestic product compares with an annual 6.7 percent in the final quarter of 2004 and represents the third consecutive quarter of slowing growth, the State Statistics Service said in a statement Monday from Moscow. (Bloomberg)

$15Bln in IPOs by '06?

Russian companies may raise $15 billion by the end of 2006 in initial public offerings as enterprises seek cash to expand amid a seven-year economic boom, an investment banker said.

Stephen Jennings, CEO of Renaissance Capital, said improved corporate governance is making it easier for Russian businesses to turn to financial markets.

The country's corporate bond market is set to double in 2005 and may reach 1 trillion rubles ($35 billion) in outstanding debt by the end of next year, he said. (Bloomberg)

Market Blog in English

Russian investment holding Finam has launched an English-language blog to provide online information on the Russian stock market, the company announced Monday.

"The Russian equity market is one of the most undervalued marketplaces in the world, with a 6.3 price-to-earnings ratio," Finam said in a statement.

The blog will provide daily market information, news analysis and an online discussion forum for investors interested in the Russian stock market, the company said. (MT)

Aeroflot Profit Hits $172M

Aeroflot, Russia's largest airline, said that profit rose by more than one-third last year as passenger and cargo traffic increased, Interfax reported.

Net income under international accounting standards rose to $172 million, from $127 million in 2003, deputy CEO Mikhail Poluboyarinov told shareholders at the company's annual meeting on Saturday, Interfax reported Monday.

The state-controlled airline carried 25 percent more cargo last year than it did the year before and flew 16 percent more passengers, CEO Valery Okulov told shareholders, the news service reported. (Bloomberg)

Surgut Expects Output Rise

Surgutneftegaz, the country's fourth-biggest oil producer, expects to increase output to 4.4 percent next year, a slower growth rate than one the company plans for 2005, amid concerns that high energy taxes are crimping investment.

Surgut may produce as much as 66.5 million tons in 2006 (1.33 million barrels per day) in 2006, CEO Vladimir Bogdanov said Monday at an investment conference sponsored by Renaissance Capital. The company plans to raise output 7.2 percent this year to 63.7 million tons of oil. (Bloomberg)

Surgut at Talakan Field

Surgutneftegaz, Russia's fourth-biggest oil producer, said it might start to produce oil from the Talakan field in eastern Siberia in 2008.

The field has the capacity to produce as much as 17 million tons per year (340,000 barrels per day) of crude, Surgut CEO Vladimir Bogdanov said Monday at an investment conference sponsored by Renaissance Capital. Initial production will be about 4 million tons per year once construction at the site is completed in 2008, he said. (Bloomberg)

TNK-BP '05 Output Rise

TNK-BP said Monday that its oil output would continue to grow above the Russian industry average in 2005 despite a big slowdown in the sector.

"I am sure we will continue to grow above the industry average in Russia and globally," TNK-BP chief executive Robert Dudley told an investment conference sponsored by Renaissance Capital. (Reuters)

Chinese Refinery Deal

BEIJING -- A private Chinese oil firm plans to invest 1 billion yuan ($120 million) in a Russian refinery joint venture that will allow it to import around 2 million tons of oil product a year to China, a Chinese paper reported Monday.

The Longdu oil company, based in the northeastern city of Harbin, has signed a deal with the Tyumen oil firm to build a plant in the Urals, the Oriental Morning Post reported.

The paper did not say how much the Russian firm would invest. (Reuters)

Spring Grain Planting

Russia had sown 28.1 million hectares with spring grains including maize by June 1, 7.3 percent down from 30.3 million by the same date last year, the State Statistics Service said Monday.

The service said in a statement that large farms accounted for 79.6 percent of the area sown with spring grains in 2005.

Total area sown with grains for the 2005 harvest at large farms, including the area on which winter grains plantings survived by June 1, declined by 3.4 percent from 2004 to 32.7 million hectares. (Reuters)

Vneshtorgbank Eurobonds

Vneshtorgbank plans to issue eurobonds in June and July 2005, bank president Andrei Kostin was quoted as saying Monday.

"We plan to place long-term papers in June and July in the West," Vedomosti quoted Kostin as saying. He did not give details.

Kostin said the bank also planned to issue short-term commercial paper for around $1 billion and would continue to borrow via syndicated loans. (Reuters)

Evraz Out of Georgia Deal

Evraz Group, Russia's biggest steelmaker, withdrew from the acquisition of Georgian manganese miner Chiaturmarganets and hydropower station VartisikheGec because it decided it could not make enough money from them.

"The government of the Republic of Georgia has accepted Evraz's decision and at all times acted in good faith during the negotiations and fulfilled its obligations relating to the conditions for the realization of the project," Evraz said in a statement on the Regulatory News Service on Monday. (Bloomberg)

20% Rise in Luxury Market

MILAN, Italy -- The luxury market will expand about 20 percent annually in the coming years, fueled by demand for products like Fendi handbags and Valentino gowns, said the head of European brand distributor JamilCo.

The growing number of wealthy Russians and the improving business environment are prompting European fashion companies to open outlets in Moscow. The country accounts for 5 percent of the global luxury market, which is worth about 130 billion euros ($158 billion), according to Bain & Co.

"Moscow is awash with luxury goods," said Eric Kraus, chief strategist at Moscow-based investment bank Sovlink. "There is a lot of money flowing in and huge pent-up demand." (Bloomberg)

President Fox in Moscow

Mexican President Vicente Fox arrived in Moscow on Monday, launching the first visit to Russia by a leader of Mexico since the 1991 collapse of the Soviet Union, news agencies reported.

Fox, who was to meet President Vladimir Putin on Tuesday, flew in from Ukraine, where he began his regional tour aimed at building commercial ties in the former Soviet Union. A large group of Mexican businesspeople are accompanying the president.

"The potential for economic cooperation is far from being fulfilled and should be realized with concrete plans, like investment, joint projects and trade," RIA-Novosti quoted Fox as saying on the eve of his visit.

Mexico is eyeing increased cooperation in various spheres, including aviation, energy and science and technology. (AP)