Capital Outflows from Russia to Continue in January

Jan. 23 – Central Bank Chairman Alexei Ulyukayev said on Thursday that the net capital outflows that plagued Russia in 2011 and weighed on the ruble are continuing in January, but the country may experience net inflows during 2012.

“We can see that outflows are continuing, because we have had to conduct sales of foreign currency this month,” Ulyukayev said at a Moscow economic conference.

Russia’s central bank has sold some US$600 million to support the ruble since the start of the year, Ulyukayev said earlier. Read the rest of this entry »

Newly Formed Lobby Group to Develop Russian e-Payment Legislation

Jan. 19 – A lobby group named the National Payment Council has been established by Visa and MasterCard, together with Russian payment services provider Zolotaya Korona, on Wednesday.

The main reason for the decision of the payment systems to create a lobby is the tightening of the domestic card market regulation by implementation of “The Law on the National Payment System.”

“Visa and MasterCard both worked closely with the government and put much effort into creating the National Payment System bill that President Dmitry Medvedev signed last June,” MasterCard Russia Chief Ilya Ryaby said. Read the rest of this entry »

Russian Private Equity Market Grows in 2011

Jan. 18 – Russia saw 15 new private equity funds established last year, but very few newly established and existing funds succeeded in attracting institutional investors, Financial Consulting Group (FCG) says in its report “Private Equity Market in 2011.”

The non-food retail sector – clothing retail, children’s clothing and toys, household appliances, and media retail (movies, music, etc.) – was at the center of attention for private equity funds last year. Read the rest of this entry »

Investors Come Back to Russia

Jan. 16 – Russia-focused equity funds attracted US$43 million of inflows in the week to January, 11, equaling about 0.4 percent of the total amount under management, UralSib Financial Corp. said in a report, citing EPFR Global Data.

“This is the first week of positive flows in the last eight,” UralSib analyst Slava Smolyaninov said in a report. Read the rest of this entry »

Merged MICEX-RTS Starts Trading

Dec. 22 – MICEX and RTS, Russia’s two main stock exchanges, started trading on a unified platform with an estimated value of US$4.5 billion in new company assets this Monday.

The merger marks the end of competition between the two bourses, allowing them to focus on attracting domestic investors, many of which have been seeking to list outside the country, Ruben Aganbegyan, president of MICEX-RTS said. Read the rest of this entry »

Russia Ranks 39th in 2011 Financial Development Index

Dec. 15 – Russia ranks in 39th out of 60 countries in the 2011 World Economic Forum’s Financial Development Index, according to a report published on Tuesday. However, many experts disagree that Moscow is becoming more of a financial hub.

The Financial Development Index, launched in 2008, is based on efficiency and size of banking and other financial services, overall business environment, financial stability, and the extent of financial disclosure and market liberalization. It grades countries on these criteria out of a maximum of 7 points and generates overall and indicator-specific rankings. Read the rest of this entry »

Report: Russia Claims Highest Economic Crime Rate

Dec. 2 – Russia has the world’s highest economic crime rate, according to a newly released survey by PricewaterhouseCoopers and The London Business School. The survey shows that the misappropriation of assets remains the most common economic crime (72 percent) with a US$5 million loss reported by 22 percent of the businesses who had encountered fraud.

A total of 126 representatives from Russia’s leading entities took part in the 2011 Economic Crime Survey. The study was designed to seek respondents’ views on economic crime in general and, specifically, about cyber-crime which is a growing concern in C-suites and boardrooms. Read the rest of this entry »

New Issue of Russia Briefing: The Russia-Belarus-Kazakhstan Customs Union

Nov. 24 –The new issue of Russia Briefing Magazine, titled The Russia-Belarus-Kazakhstan Customs Union, is out now.

Nearly two years have elapsed since Russia, Kazakhstan and Belarus boldly began to link their economies by forming a Customs Union planned to evolve into a more ambitious common market by 2012, with Russia as its hub.

While the three states are still a long way off from the eventual Eurasian Union heralded by Russia’s Prime Minister Vladimir Putin as a bridge between Asia and Europe, the agreement has thus far managed to ease trade among the three large former Soviet economies in a rather short period of time.

In this issue of Russia Briefing, we will assess the implications the Customs Union has on trade, looking broadly at the principles and progress of the union thus far, and clarifying key modifications to the VAT procedures for transactions involving the three member states. Read the rest of this entry »

Russia’s Schools and Clinics to be Free from Profit Tax

Nov. 21 – Russia’s Cabinet has finally approved a list of educational and medical services that are no longer subject to pay profit tax. Authorities believe the move will attract investment and inspire entrepreneurs to set up new schools and hospitals, but the market is predicting only modest results.

The law on zero taxes for these kinds of entrepreneurs until January 1, 2020 was signed last year, but it could not come into effect until the list was compiled. Now the organizations providing the listed services will be exempt from the 20 percent profit tax. Read the rest of this entry »

The Asia Briefing Bookstore