The ever-positive Vladimir Putin is forecasting 8% inflation for the coming year, which would be a 'post-Soviet low'.  The government will sell tons of its gold stockpile this year to cover its budget deficit and help it fund other supporting measures such as Moscow's $570 million federal loan.  Private lender Alfa Bank is working on debt restructuring terms for giants BasEl and RusAl, and threatening to take the latter to court over unpaid debts.  St Petersburg Bank plans to raise up to $150 million selling additional preference shares to cope with its losses.  Reuters has compiled a timeline on Russia's bad loans.  'For all of the vaunted stability of the current regime, Russians still don't believe in the permanence of their system enough to invest into their society,' comments this reporter in a piece about ...

According to Bloomberg, Russia intends to pay off the last of its Soviet-era $1.2 billion debt this year to ease the fears of potential investors.  Ria-Novosti reports that the World Bank has suggested that Russia's GDP will reach pre-crisis levels in the third quarter of 2012.  In September manufacturing grew for the first time in 14 months.  Rusal head Oleg Deripaska has said that oversupply has put the aluminum market under 'huge stress' and he will be 'very cautious' on investing outside of Russia.  Russia's Central Bank will continue intervening in the foreign currency market because of the country's vulnerability to oil price fluctuations.  Alfa Bank head Pyotr Aven, who has apparently developed a reputation for gloom-mongering, is uncharacteristically optimistic that there will be no second wave of crisis.  The European Bank for Reconstruction and ...

A government source has suggested that Russia may reach pre-crisis levels in 2012.  Budget revenues in 2010 are expected to exceed expectations with predictions of oil trading at $57 a barrel as opposed to $54.  Despite the optimism, the government does not plan to increase spending.  VEB has agreed to a $917.3 million subordinated loan to Alfa Bank.  Payless ShoeSource will expand into Russia in 2010, with a plan to open 90 stores in about 5 years.  Fast retailing, which runs international clothing chain Uniqlo, also plans to open stores in Russia in spring 2010.  Reuters has a useful breakdown of what rival bidders Magna and RHJ have in mind for Opel if their bid is successful.  Steel-maker Evraz, which posted major losses yesterday, says that it imagines an upturn in domestic demand to be ...

An amusing turn of phrase from the Financial Times's take on Gazprom horrible first quarter results (-62%!!).  While many stock analysts have been laying on the abuse on Gazprom, and of course we're skeptical of its opacity and political instrumentalization, I tend to believe the minority out there (meaning Alfa Bank) who points out that Gazprom's quarterlies are going to see some wide variation, and that the beast is far from dead.  After all, what other energy company CEO has been blessed by the patriarch to keep the big returns rolling in?

Investors can only wonder how different Gazprom's prospects might look were it not so fond of playing chicken with Kiev. In fairness, who was ...

by Edward Hugh: Barcelonabr /br /br /The Russian ruble strengthened the most in more than three months against the dollar yesterday (gaining 1.7 percent to 32.2247 per dollar at one point) as oil rebounded above $60 a barrel and OAO Sberbank reported better-than-expected earnings. Sberbank shares jumped 5.1 percent after first-quarter net income turned out to be above analyst estimates. But the rise was also helped by the fact that Russia’s central bank spent approximately $2 billion from reserves to try to stop the ruble from falling yesterday, taking central bank reserve spending over the two working days since they lowered interest rates half a percantage point on Friday to around $4 billion, a href="http://www.bloomberg.com/apps/news?pid=newsarchiveamp;sid=aTqgrOY1vdEo"according to reports in the newspaper Kommersant/a.br /br /Russia’s central bank cut its main interest rates for the fourth time in less than three months at the end of last week after the government estimated the ...

In the first six months of the year the budget deficit grew to the equivalent of 4.2% of GDP.  The Central Bank has cut interest rates again, for the fourth time in three months.  The Moscow Times has a rather bleak prognosis of the economic situation.  'Russia today often seems to combine the worst aspects of a free market and a command economy' - an op-ed piece in the Washington Post analyzes the unlikelihood of imminent modernization.  ArcelorMittal may sell a coal mine in the Kemerovo region after the local government threatened a takeover.  The Times features an interview with indebted billionaire Oleg Deripaska in advance of a film about the tycoon to be broadcast on the BBC.  GAZ has agreed on plans for restructuring its $1.25 billion debt, but Alfa Bank is dissatisfied with ...

Ikea has officially suspended all developments in Russia until 'key issues' have been dealt with.  Bloomberg reports that Russia intends to combine its seven regional phone companies and create a new national mobile-phone operator, through Svyazinvest merging the units and then trying to merge with one of the 'big three' telecoms operators.  Russia and Egypt have agreed on a long-term wheat deal to increase imports.  Reuters has a factbox on Russia's struggle with bad loans.  Russia says it will not intervene in the arguments between Norway's Telenor and Russia's Alfa Group over their shares in telecoms group Vimpelcom, unless Alfa has acted illegally.  An op-ed piece in the Moscow Times argues that Russia may win the legal battle with Telenor, but the PR war is lost.  Alfa Bank has said that the shrinking in capital ...

Good 'ole Norway.  You'd never hear a peep from them about human rights or democracy shortcomings over in Russia, and in exchange they are gifted with some large contracts for the state energy company.  Nobody ever said it was a good strategy to keep their assets safe.  While perhaps Gazprom and the environmental and tax gestapo is held at bay, it doesn't account for other private groups using the Kremlin to their business advantage ... hence the court-ordered sale of Telenor's stake in Vimpelcom over to Mikhail Friedman of Alfa Bank.There are a lot of arguments that one could make about what this transaction means for foreign business in Russia, but we should stop calling it "a test" of Russia's investment climate.  There is no test and there is no investment environment - we're in the middle of ...

Today the Russian government has announced a 16.9% drop in industrial production in the year to April, which was the sixth consecutive month of contraction, exceeding forecasts by the banks.  The slowdown in industry has the potential to be politically catastrophic for Russia, as enormous sectors of the population (and entire regions) are employed by a relative small group of corporate and state business titans - many of which are now on the state's lifeline.Severstal, one of Russia's largest steelmakers, has announced first quarter losses which Alfa Bank says may cause them to post significant debts in 2009, which may threaten their ability to attract new loans without violating Eurobond covenants.  The company is also experiencing troubles in its North American operations.  ...

The Russian Finance Ministry says that all of the major tax breaks have been introduced and there will be 'no sensations' in tax proposals over the next three years.  Rusal claims to have cut costs by $554 million in the first quarter, but workers suggest this is affecting safety and efficiency.  According to Ria Novosti, Rusal has seen a decrease in its primary aluminum output by 7.2% year-on-year in January-March.  Alfa Bank has restructured 5% of its loan portfolio, according to Reuters the figure stands at 15%.  Magnitogorsk Iron & Steel Works has agreed to restructure car maker Avtovaz's outstanding debt in a long term cooperation agreement.  Vladimir Yevtushenkov's Sistema is apparently hoping to bid for control of telecoms giant Svyazinvest.  Sberbank issued 16.5 billion rubles in mortgage loans in the first quarter.  The ...