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. Last Updated: 07/27/2016

Business in Brief

Reserves Hit $149Bln

Russian foreign currency and gold reserves rose to $148.9 billion on higher oil revenue in the seven days to Aug. 12.

The reserves increased by $3.1 billion in the week, the Central Bank said in a statement on Thursday. The reserves rose $1.5 billion in the week to Aug. 5, according to the bank.

The reserves decreased by $9.8 billion to $142 billion in the three weeks ending July 22 as Russia, the world's second-biggest oil supplier, used windfall oil revenue to repay early debt owed to the Paris Club of creditor nations. (Bloomberg)

July GDP Growth 6.4%

Annual economic growth was 6.4 percent in July and year-to-date expansion in gross domestic product was 5.7 percent, Economic Development and Trade Minister German Gref said on Thursday.

Gref told a Cabinet meeting that consumer prices fell by 0.1 percent in the first 15 days of August. He said prices would fall by up to 0.2 percent over the month, when the new harvest typically depresses the food component of the CPI basket. (Reuters)

Inflation to Rise to 11%

Consumer prices will increase by 10 percent to 11 percent this year, in line with the government's target, Central Bank Chairman Sergei Ignatyev told a government budget meeting on Thursday, Interfax reported.

Consumer prices declined in the first two weeks of August for the first time this year, the newswire reported Wednesday, citing an unidentified government official.

Prices rose 13.2 percent in July from the year-earlier period, the State Statistics Service reported on Aug. 5. (Bloomberg)

Gref: 2% Oil Growth in '05

Economic Development and Trade Minister German Gref said Thursday that disappointing oil output growth figures in the first half of 2005 meant the full-year growth forecast should be cut to 2 percent from the previous 3.3 percent.

Gref told a government meeting that the period of explosive output growth was over and that Russia was unlikely to show strong growth in exports, either, saying sales abroad would rise by no more than 4 percent. (Reuters)

Norilsk Q1 Profit Down

Miner Norilsk Nickel reported a lower first-quarter net profit on Wednesday due to a dip in metals sales.

Norilsk said its first-quarter net profit fell to $446 million from $448 million in the same period a year ago, while sales rose to $1.63 billion from $1.583 billion.

"Metals sales in the first quarter were a bit lower, and that's why the profit number is a bit lower," said Dmitry Usanov, head of Norilsk's investor relations department. (Reuters)

Norilsk Unit Buys Into Mine

Polyus Gold, the gold unit of Norilsk Nickel, will soon buy into a Siberian gold deposit in which Ireland's Celtic Resources Holding has a 50 percent stake, a source close to the deal said Thursday.

Canada's Barrick Gold, the world's third-largest gold mining company, owns about 10 percent of Celtic.

The source said Norilsk's gold unit, Polyus Gold, would buy a 50 percent stake in the Nezhdaninskoye gold mine in Yakutia from an affiliate of Russian diamond monopoly Alrosa. Norilsk would also take over two smaller deposits, Kuranakh and Kyuchyus, the source said. (Reuters)

Norilsk Increases UES Stake

Norilsk Nickel, the country's biggest miner, bought 2.51 percent of national power monopoly Unified Energy Systems for $322 million in June, Interfax reported, citing data from Norilsk.

Norilsk now owns 3.52 percent of UES, Interfax said. The miner bought 1.01 percent of the utility in 2003 for $115.6 million. (Bloomberg)

UES Tax Bill Cut 90%

Unified Energy Systems scored a victory on Thursday in its battle with tax officials after Moscow's Arbitration Court cut about 90 percent off its 2001 back tax bill.

A spokesman said the court had ruled to cut the bill from 3.68 billion rubles ($129 million) to 360 million rubles. (Reuters)

Mechel Q1 Income Triples

Steelmaker Mechel said its net income more than tripled in the first quarter as steel prices peaked.

Net income advanced 219.6 percent to $169.5 million, from $53 million in the same period last year. Revenue rose 60 percent to $1 billion, Mechel said in a statement on Thursday.

"Toward the end of the quarter, we began to see increasingly difficult market conditions for our products, a situation we expect to experience for the remainder of this year," CEO Vladimir Iorich said. (Bloomberg)

Alrosa Q1 Net Profit Up

Diamond giant Alrosa reported a 40 percent jump in first-quarter net profit on Thursday due to buoyant demand for the precious gems.

Alrosa, which produces one-quarter of global rough diamonds, said in its first quarterly report calculated to IFRS accounting standards that net profit jumped to 2.3 billion rubles ($80.8 million) from 1.6 billion rubles in the year-ago period. State-owned Alrosa said sales rose to 20.3 billion rubles from 16.4 billion rubles in the first quarter of 2004. (Reuters)

Yevroset Shops With Rivals

Cell phone retailer Yevroset is buying phones at retail outlets of its competitors amid concerns over a possible cell phone shortage, newspaper reported Thursday.

Yevroset declined to comment, but competitor Svyaznoi confirmed that Yevroset has been buying phones from them this week, said.The news comes after analysts warned of cell phone shortages and price increases due to unusually high consumer demand this summer and the Interior Ministry's seizure of around $10 million worth of smuggled phones. (MT)

Credit Insurer Opens Office

Credit insurance company Euler Hermes has opened a representative office in Moscow, the company said in a statement on Thursday.

Euler Hermes, part of the Allianz group, will work with Russian insurance heavyweight Rosno to extend credit insurance to local companies and exporters to Russia, the companies said in a joint statement. (MT)

RZD to Sell $1.2Bln Bond

LONDON -- Russian Railways, or RZD, plans to sell 35 billion rubles ($1.2 billion) of bonds to modernize its assets and for new projects.

The bonds will be offered in four sales, the company said in a statement Thursday. RZD will give dates for the sales after the securities are registered with regulators. (Bloomberg)

Rival Brewer Bids

SABMiller and Efes have both offered to buy one of Russia's last major independent breweries, Krasny Vostok, Vedomosti reported Thursday.

"A deal could happen within a month," the paper quoted a senior manager in a major brewing company as saying. It said Krasny Vostok could be worth up to $1 billion. (Reuters)

$500M TNK-BP Loan

BP's Russian venture, TNK-BP, is raising a $500 million unsecured syndicated loan hot on the heels of a $600 million secured deal, bankers said on Thursday.

HSBC, Sumitomo and WestLB have been mandated to raise the three-year financing which will be priced at 70 basis points over LIBOR, compared to a pricing of 90 basis points over LIBOR on the previous 5-year deal secured to export sales. (Reuters)

Grain Production

Farms threshed 44.6 million tons of grain by Aug. 16, 2.4 million tons more than over the same period in 2004, the Agriculture Ministry said on Thursday.

It said that grain had been threshed from an area of 18 million hectares, or 40.5 percent of the total sown area. As for wheat, farms threshed 29.9 million tons from an area of 10.3 million hectares -- 40.3 percent of the sown land and 4 million tons more than by the same period last year. (Reuters)

State Grain Intervention

Agriculture Minister Alexei Gordeyev was quoted as saying on Thursday that state grain intervention would start on Aug. 29.

In May, the government agreed to allocate up to 6.1 billion rubles ($213.6 million) for the long-expected grain purchases from domestic producers in a move aimed at raising prices. "The Agriculture Ministry has decided to start grain purchases on Aug. 29," Gordeyev told Interfax. (Reuters)