Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

Cold Slows Industry Output

Exceptionally low temperatures cut Russia's February industry growth to a mere 1 percent in year-on-year terms, data showed on Monday, with the manufacturing sector suffering most.

Analysts had expected an increase of 4.6 year on year, according to a Reuters poll.

Manufacturing contracted by 0.1 percent in February, with the production of sugar falling by a spectacular 42.8 percent year on year as international prices for raw sugar reached their 25-year peak last month.

Production of construction materials, no longer in demand at idle building sites, was another big loser in February, with production of bricks falling by 8 percent. (Reuters)

Russia-U.S. WTO Talks

GENEVA -- Russian and U.S. envoys met on Monday in the latest attempt by Moscow to win Washington's clearance to join the World Trade Organization after 13 years of trying, diplomats said.

Although chief Russian negotiator Maxim Medvedkov brought new proposals to break a deadlock over access to Russia's banking and insurance markets, the outcome remained far from clear, they added.

"The United States wants its banks and insurance companies to be able to set up branches across Russia, but the Russians are making clear that they will not agree to that," said one official after the talks.

Russia, having settled entry pacts with all other major trading powers, including the European Union and Japan, is anxious to wrap up the U.S. bilateral negotiations this year. (Reuters)

Rosneft to Spend $1Bln

Rosneft will spend at least $1 billion developing oil and gas fields in eastern Siberia, RIA-Novosti reported, citing Rosneft president Sergei Bogdanchikov.

Bogdanchikov was speaking during a weekend trip to Sakhalin Island, where Rosneft is participating in the Sakhalin-1 project, the state-run news service reported. RIA-Novosti did not provide any more information about Rosneft's plans for eastern Siberia. (Bloomberg)

2 Rival Yukos Boards

Yukos' Moscow office has two rival boards of directors after managers rebelled against the company's London-based executives, Kommersant reported Monday, citing unidentified sources.

The board, at a meeting in Vienna on March 15, fired Anatoly Nazarov, the head of Yukos' Moscow office, for disloyalty to the company's chief executive officer, Steven Theede, the newspaper reported. A rival board meeting, which convened on the next day in Samara, reinstated Nazarov, Kommersant said.

Both meetings were legitimate in a legal sense, the newspaper said. (Bloomberg)

Chechen Oil Company?

Chechnya has asked the federal government to give it control of the local oil and gas company, Interfax reported Monday.

The Chechen government wants the Russian state to transfer a 2 percent stake in Gronzneftegaz, a unit of Rosneft, to get a controlling stake of 51 percent, Interfax reported on March 18 from Grozny.

Dukvakha Abdurakhmanov, speaker of the republic's parliament, said Rosneft earned more than 17 billion rubles ($610 million) from the sale of Chechen oil and that only 30 million rubles flowed back to Chechnya, Interfax said. (Bloomberg)

Mechel Executive Ups Stake

Mechel said chairman Igor Zyuzin had raised his stake in the company to 47.1 percent from 42.2 percent as part of a transaction that doubled the number of freely traded Mechel shares.

The company's so-called free float increased to 23 percent of all shares outstanding, Mechel said in a statement Monday. (Bloomberg)

MTS Plans Takeovers

Mobile TeleSystems will spend $7 billion to $10 billion on acquisitions outside Russia, Vedomosti said Monday, citing the company's chief executive officer.

The spending spree, most of which may be completed by the end of 2008, should allow Mobile TeleSystems to become one of the world's top 10 mobile phone operators in 2010, Vedomosti reported, citing CEO Vasily Sidorov.

Mobile TeleSystems aims to have more than 100 million subscribers by then, Vedomosti reported.

The most interesting markets include the Middle East, Southeast Asia, and southern and southeastern Europe, Sidorov told the newspaper. The company plans to invest about $1.9 billion this year on its networks, of which $1.3 billion will be spent in Russia, the newspaper said. (Bloomberg)

Svyazinvest 2005 Net Rises

Svyazinvest said profit soared 59 percent last year to 27.6 billion rubles ($1 billion) as the company revalued the assets of its Moscow unit, MGTS.

Sales advanced 14 percent to 211 billion rubles in results conforming to Russian accounting standards, chief executive officer Valery Yashin told reporters Monday. Costs rose 14 percent to 160.4 billion rubles.

State-run Syvazinvest's 2006 profit will probably rise 58 percent to 43.7 billion rubles on revenue of 216.4 billion rubles, Yashin said. (Bloomberg)

Svyazinvest Sale Delayed

Russia has all the legal mechanisms needed to sell national fixed-line telephone holding Svyazinvest and the only obstacle is political opposition, IT and Communications Minister Leonid Reiman said.

"The government hasn't announced the privatization of Svyazinvest because there are people who think that it shouldn't be done," Reiman told reporters Monday, declining to elaborate.

The government has said it will sell its remaining 75 percent stake in Svyazinvest almost every year since 1997, when it auctioned 25 percent to a group of investors including U.S. billionaire George Soros for $1.88 billion. (Bloomberg)

Local Call Prices to Rise

Operators of local fixed-line telephony can raise their prices by no more than 20.2 percent this year but long-distance prices will fall, a government official said Monday.

Vitaly Yevdokimenko, deputy head of the Federal Tariffs Service, said that local fixed-line firms, whose key source of revenue is charges for local calls, would have to limit their annual price rises by 15 percent in the next two years.

But Yevdokimenko also told reporters that prices of long-distance and international calls would go down 7 percent in 2006, 12.5 percent in 2007 and 16.5 percent in 2008. (Reuters)

Borders Tightened on Flu

Russia plans to tighten border controls and is continuing the mass vaccination of domestic fowl as it seeks to prevent the spread of deadly bird flu, senior veterinary officials said Monday.

Chief epidemiologist Gennady Onishchenko, in a letter to regional health officials, proposed preparing medical facilities at ports, airports, railway stations and other border crossings to hospitalize people suspected of having bird flu.

"To prevent the penetration and spread of avian influenza, I propose an increase of sanitary control at check points on the border of the Russian Federation with China, Ukraine, Georgia, Azerbaijan and Kazakhstan," Onishchenko said in the letter. (Reuters)

Sberbank Income Rises 48%

Sberbank said net income probably rose 48 percent to a record 64.5 billion rubles ($2.33 billion) last year.

The figures were posted on Sberbank's web site Monday as part of a report management presented to the board of directors on March 17. The report did not say which accounting standards were used to calculate profit. (Bloomberg)

Kazakh Oil Reserve Tenders

ASTANA, Kazakhstan -- Kazakhstan, which holds the largest oil reserves in the Caspian Sea, has shelved plans to call tenders for new offshore oil blocks there for the time being, the country's oil minister said.

Kazakhstan has told Western firms it will allow them to bid openly for new fields to make the oil business more transparent. But it remains unclear when the plan might be implemented.

"There is no need … to hold talks or hold tenders. In the future, maybe. But today there is no need," Energy Minister Baktykozha Izmukhambetov said in an interview over the weekend.

"No tenders are expected this year," he added. (Reuters)

Crowne Plaza at WTC

The 572-room Soviet-era Mezhdunarodnaya Hotel on Krasnopresnenskaya Naberezhnaya is to reopen as a Crowne Plaza Hotel in early 2007, the InterContinental Hotel Group announced last week after signing an agreement with the building's owner, the World Trade Center Moscow.

The project marks the launch of the five-star Crowne Plaza brand on the Russian market, which InterContinental Hotels Group chief executive Andrew Cosslett in a statement described as a strategic market for the company. (MT)

Mall Space to Double

The amount of shopping center space on the Russian market will almost double by the end of 2007, outpacing development activity in all other European countries, according to a report released last week by Jones Lang LaSalle.

While volumes in the pipeline in Spain and Italy are slightly higher, at about 2 million square meters each, the 1.8 million square meters planned in Russia will almost double total volume, the report said.

Development in Spain and Italy, by comparison, will increase the total stock by about 20 percent, it said. (MT)

Accommodation 'Bad'

Two-thirds of Russians consider their accommodation to be "bad," according to a survey of 1,500 people by the Public Opinion Foundation.

One-quarter of respondents said their accommodation was "satisfactory," while 4 percent described it as "good."

The worst results were in rural areas, Siberia and the Far East, where almost three-quarters of respondents said their accommodation was bad. In Moscow, half of the respondents had a negative opinion of their housing, 11 percent said it was good, and one-quarter said they were satisfied. (MT)

For the Record

Authorities in Kazakhstan said Monday that a swan found on the Caspian Sea coast has died of bird flu in the first case involving the deadly H5N1 strain in the country. (AP)

Kazakhstan's top bank, Kazkommertsbank, is considering floating 17 percent of its stock in an initial public offering on a foreign stock exchange this year, its chief executive said Monday. (Reuters)