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. Last Updated: 07/27/2016

Business in Brief

Foreign Reserves Rise

Russia's foreign currency and gold reserves surged to a record $262.9 billion, surpassing Taiwan's to become the world's third largest as oil and gas prices hover near all-time highs.

The reserves increased $7.2 billion in the week to July 21, the Central Bank said by e-mail Thursday, the biggest weekly increase in three months, after adding $2.5 billion in the week to July 14.

Reserves have grown from $12 billion in 1998 as the price of Urals rose more than sixfold in that period. (Bloomberg)

Gref Counts in "Not Rubles"

Economic Development and Trade Minister German Gref on Thursday had to be rescued by Cabinet colleagues from breaking a taboo: using the word "dollar." The State Duma is in the process of adopting a law that would fine ministers for saying "dollar" when they could have used "ruble."

Briefing a televised Cabinet meeting about new investment in the Siberian city of Tomsk, Gref said it was worth "30 million …", and then hesitated and shuffled nervously through his notes before being prompted by a colleague.

Gref regained his composure and said: "Seven hundred million rubles. Thank you." Laughing nervously, he added: "Thirty million not rubles." (Reuters)

GDP Grew 6.3% in H1

The economy expanded at an annualized rate of 6.3 percent in the first half of the year, Interfax reported, citing Economic Development and Trade Ministry data.

Economic Development and Trade Minister German Gref told President Vladimir Putin last week that growth would probably be either 6.4 percent or 6.5 percent this year, the eighth straight of expansion.

The $770 billion economy expanded 6.4 percent last year, compared with 7.2 percent in 2004, as oil production advanced at 2.2 percent, the slowest pace since 1999. (Bloomberg)

Putin Signs Conversion Law

President Vladimir Putin signed a bill into law lifting restrictions on foreigners investing in the local bond and currency market, Interfax said.

The bill is aimed at implementing changes that would make the ruble fully convertible, the news agency said, citing the Kremlin press service. The restrictions were dropped on July 1. (Bloomberg)

Rosneft on RTS on Sept. 15

Shares of Rosneft, the state oil company that raised $10.4 billion in Russia's biggest initial public offering, may be added to the Russian Trading System Index on Sept. 15.

The shares will be considered for inclusion from Aug. 15 to Sept. 1, the Russian Trading System, the country's second-largest exchange, said Thursday by e-mail.

The dollar-denominated RTS Index, which has 50 members, is used by international investors to track Russian equities. (Bloomberg)

Uzbekistan Gas Prices

TASHKENT, Uzbekistan -- Uzbekistan could double the price of its gas exports, a government source said Thursday, presenting a possible challenge to monopoly Gazprom, which hopes to buy Central Asian gas cheaply.

"Right now the government is considering the possibility of increasing prices to a market level. This could be $100, $110 or $120 per thousand cubic metres of gas," said the source, without disclosing other details or timeframes.

Uzbekistan and its neighbor Turkmenistan, the biggest gas producers in Central Asia, rely on Gazprom's pipeline network to reach export markets. (Reuters)

UES Stock for Executives

Power monopoly Unified Energy Systems' board will vote Friday on a stock options plan for executives of its key subsidiaries, a UES spokesman said Thursday.

The spokesman said a maximum of 2 percent of shares would be set aside under the program for executives at the electricity monopoly's units. He did not give further details.

The giant monopoly, which produces enough electricity to supply Italy and Germany combined, is being broken up under reforms aimed at raising much-needed investment, as well as a transition from regulated to deregulated electricity tariffs. (Reuters)

Telenor Appeal Rejected

HELSINKI -- VimpelCom, the country's second-biggest mobile phone company, said a court had rejected a Telenor appeal seeking to block the Russian company's expansion in Ukraine.

A court of appeal upheld a May 15 ruling by the Moscow Arbitration Court, which approved Vimpelcom's acquisition in 2005 of wireless operator Ukrainian Radio Systems, the Moscow-based company said in a statement Thursday.

Oslo-based Telenor and billionaire Mikhail Fridman's Alfa Group, which own 26.6 percent and 32.9 percent of VimpelCom respectively, are locked in a legal battle over the company's expansion into Ukraine, where both sides already own telecommunications assets. (Bloomberg)

Turkish Court Backs Alfa

ISTANBUL, Turkey -- A Turkish court has exempted Alfa Group from offering to buy out other shareholders in Turkcell Iletisim Hizmetleri, Turkey's biggest mobile phone operator, after Alfa acquired a stake in the company.

The court ruled that Turkey's Capital Markets Board was right to exempt Alfa from making a matching offer to minority investors, according to a filing with the Istanbul Stock Exchange. It overturned an earlier court verdict that had suspended Alfa's exemption.

Alfa bought 13 percent of Turkcell for $1.6 billion from Cukurova Group in November. The Turkish regulator said Alfa, which gets two seats on Turkcell's seven-member board, did not have to make an offer to minority investors because the transaction did not involve a change of control over Turkcell. (Bloomberg)

EBRD Loan for Brickmaker

Wienerberger Kirpitsch, a unit of Wienerberger, the world's biggest brickmaker, won 13.3 million euros ($16.8 million) of funding for a plant in Russia from the European Bank for Reconstruction and Development. (Bloomberg)

SocGen Leasing Acquisition

PARIS -- Societe Generale, France's third-largest lender, is taking over the leasing activities of SKT Bank following its acquisition of the Russian lender.

SKT Bank's leasing business will be integrated into Societe Generale's Equipment Finance unit, the Paris-based lender said by e-mail Thursday.

Societe Generale completed the acquisition of SKT Bank earlier this month, seeking to expand its consumer-lending business there. (Bloomberg)

Grain Crop Down 15.8%

Russia's large and medium-sized farms had harvested 14.99 million tons of grain by bunker weight by July 25, 15.8 percent less than the 17.80 million the farms had brought in a year ago, the Agriculture Ministry said Thursday.

A ministry statement said this figure included 12.15 million tons of wheat, down from 14.93 million on July 26 last year.

On Monday, the ministry said the country had harvested a total of 20.8 million tons by July 24 this year, "in line with volumes a year ago." (Reuters)

Estonia Oil Exports

ST. PETERSBURG -- Estonia's Sillamae oil terminal has started exports of Russian gas condensate, sending the first 30,000-ton cargo to Finland, the outlet's senior official said Thursday.

"The first 30,000-ton tanker left for Finland's Porvoo yesterday. We are planning to send the next 30,000-ton cargo of gas condensate to Rotterdam at the end of July," the terminal's general director Nikolai Vader said.

Vader said the terminal planned to load three tankers in August, but gave no forecast for 2006 overall. (Reuters)

Serbia, Gazprom Pipeline

BELGRADE -- Serbia will build a 400 kilometer cross-country gas pipeline together with Gazprom, a project worth more than $800 million, the Serbian government said Thursday.

The deal between Serbia, its gas monopoly Srbijagas and Gazprom-Gazexport would make Serbia "one of the key regional participants in gas transport," the Serbian government said in a statement after its weekly session.

A source in the government said a memorandum of understanding was due to be signed within weeks, after ministers return from their summer recess. Sources familiar with the plan said the pipeline in Serbia would ultimately be linked to the Bluestream pipeline. (Reuters)