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. Last Updated: 07/27/2016

Business in Brief

Exchange for Smaller Firms?

The Russian Trading System, the country's second-largest stock exchange by volume, plans to start an alternative market for smaller companies Tuesday.

Paper Mill Kommunar will be the first company to trade on RTS Start, a market for companies with less than $100 million in market capitalization, the company said Monday. RTS hopes to have 50 companies trading on RTS Start within two years, it said. (Bloomberg)

Venezuela to Buy Missiles

SAO PAULO, Brazil -- Venezuela's government will purchase about $290 million worth of Russian-made anti-aircraft missiles, Agencia Estado news agency reported.

Venezuela will buy Tor-M1 anti-aircraft missiles, the news agency said, citing comments made by Venezuelan Defense Minister Raul Baduel on Jan. 25. The missiles will be used in combination with radar stations imported from China and with the 24 fighter jets, also manufactured in Russia, to defend Venezuela's air space, Baduel said, Estado reported. (Bloomberg)

Ministry Fights Tax Havens

The Finance Ministry will focus on fighting offshore tax shelters over the next three years, Kommersant reported Monday, citing the ministry's tax policy plan for 2008 through 2010.

Revenues of foreign subsidiaries controlled by Russian companies may be taxed the same as Russian-based companies from 2009, the newspaper reported, citing the ministry's plan. The State Duma will have to approve changes to the tax legislation to put this plan into action, Kommersant said. (Bloomberg)

Japan Reassured Over LNG

The Industry and Energy Ministry has assured Japan that it will get liquefied natural gas from Sakhalin Island on time in 2008 after Gazprom gained control of the scheme from Shell.

Shell and its Japanese partners, Mitsui and Mitsubishi, agreed last year to sell control in the Sakhalin-2 project to gas export monopoly Gazprom for $7.45 billion after months of pressure from environmental authorities. (Reuters)

Rosneft, Sovkomflot Venture

State oil firm Rosneft and the country's biggest shipping company, Sovkomflot, have set up a joint venture to serve Rosneft's offshore projects, Rosneft said Monday.

"It [the agreement] will allow the oil company to ease the burden connected with the noncore business of providing sea components to its offshore and other big projects in Russia," Rosneft said in a statement. (Reuters)

X5 Denies Sale Report

X5 Retail Group denied a report by Kommersant that it was considering selling a stake to an international retailer.

"The company and its major shareholders do not intend to sell its business in a medium-term perspective and are focused on the realization of a five-year strategy of the group's development on the Russian market,'' X5 CEO Lev Khasis said Monday. Carrefour, Wal-Mart and Tesco are interested in buying all or part of X5, Kommersant reported, citing a manager from the company. (Bloomberg)

Comstar Gets Licenses

Telecoms firm Comstar has received licenses to provide IP voice data transmission, including WiMAX services, in the country's twenty largest regions, the company said on its web site Monday.

The new licenses will allow Comstar "to start up greenfield operations in the areas," as well as giving it the chance to providing telecommunications solutions to priority regions, chief executive officer Eric Franke said. (MT)

Azeris Mull Tanker Purchase

LONDON -- Azerbaijan may spend as much as $500 million to create an oil-tanker company to carry shipments from Georgia and Turkey, TradeWinds reported Monday, without citing anyone.

The new company may have as many as six tankers each capable of hauling 80,000 tons of crude oil, TradeWinds said. (Bloomberg)

WBD Plans Eurobonds

Dairy and fruit juice company Wimm-Bill-Dann plans to offer $100 million to $150 million in two-year Eurobonds with a yield of up to 8.5 percent, the firm said.

The placement will begin February, with proceeds being used to finance acquisitions and the expansion of capacity, a spokesman said Monday. (Reuters)

Gold Deposits to Fall

Gold output is expected to fall 2 to 4 percent this year, the third consecutive year of decline, as open-pit placer deposits are becoming depleted, the main industry lobby's chief said Monday.

"The picture in 2007 will be the same as in 2006, unless the government takes measures to support gold production from placers," said Valery Braiko, head of the Russian Gold Industrialists' Union. (Reuters)

Meinl to Build Ukraine Mall

KIEV -- Meinl European Land, an Austrian real estate company that bought four shopping malls in Moscow, plans to build a shopping center in Ukraine as it seeks to expand in Eastern Europe.

Meinl Land will construct a mall in the Black Sea city of Odessa, in southern Ukraine, Nadine Gilles, the head of investor relations at the company, said Wednesday. Construction of the shopping center will be finished in the first quarter of 2009 and may cost as much as $194 million, Gilles said.

Meinl Land said Jan. 22 it would raise as much as $1.19 billion in a share sale to finance real estate projects in Central and Eastern Europe, where countries' economies and property prices are growing faster than in Western Europe. (Bloomberg)

Prices See Another Drop

Average prices for property in Moscow fell by $5 to $4,203 per square meter in the period from Jan. 22 to Jan. 29, said, a web site that tracks the market.

Over the month period, costs for real estate has fallen by 0.16 percent, the web site said.

However, the report's authors noted that the market should not expect a significant fall in prices and that this trend is more likely to indicate stabilization in real estate prices. Moreover, information for the index is compiled without data for elite apartments, which tend to push up average price data. (MT)

Property Spending Surges

EDINBURGH, Scotland -- Global commercial real estate spending jumped to $643.3 billion by 33 percent last year as investors looked to boost returns and cut risk by switching from stocks and bonds, according to real estate adviser Cushman & Wakefield.

Investment in Europe surged 51 percent to $295 billion. Central and Eastern Europe, led by Poland and Russia, accounted for 5.5 percent of European investment in 2006, up from 1.1 percent in 2001. (Bloomberg)

Bank Eyes Russia Expansion

DUBAI, United Arab Emirates -- Dubai Islamic Bank, the biggest lender in the United Arab Emirates complying with Muslim banking rules, is considering a share sale to fund expansion of its real estate subsidiary, Deyaar, Gulf News said Wednesday.

The developer has appointed Ernst & Young to advise on the IPO, the newspaper said, citing Deyaar CEO Zack Shahin. The capital raised will allow Deyaar to expand into India, Russia and Kazakhstan, Gulf News said. (Bloomberg)

Africa Israel Raised to "Buy"

TEL AVIV, Israel -- Africa Israel Investments had its share rating raised to "buy" from "market perform" by Leader & Co. after its controlling shareholder said the firm's market value will almost double by the end of 2007.

Africa Israel, which now has a market value of $3.6 billion, will be worth $7 billion by the end of the year, Lev Leviev told the Haaretz newspaper.

Leviev's expectations are partly based on his plans to sell shares in the company's real estate holdings in Russia and Eastern Europe, Alon Glazer, an analyst at Leader & Co., said in a report Monday.

"We believe that we should give weight to the comments of Leviev,'' Glazer said. (Bloomberg)