Russia 110111 Basic Political Developments

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Russia cancels flour export ban

http://en.rian.ru/business/20110111/162096614.html
10:39 11/01/2011

MOSCOW, January 11 (RIA Novosti) - Russia cancelled its flour export ban on January 1, after the government decided to ease the ban following appeals from flour millers who fear losing foreign customers.

Russia introduced the ban on wheat, barley, rye, corn and flour exports on August 15 following the worst summer drought in decades, which damaged around a third of the country's crops. Initially, the ban was in force until December 2010, but it was later extended until June 30, 2011.

According to the Russian Grain Union, Russia exports flour to Mongolia, Afghanistan, South Korea, Israel, Turkmenistan, Tajikistan, Moldova, Thailand and other states.

http://finam.info/need/news2476C00001/default.asp


Anton Safonov, Investkafe analyst commented: "In early September, the government partially lifted a ban on the export of grain and flour, which is probably conditioned to improve forecasts of shortages of grain. For larger mills it was very important that the embargo was not extended because they bear huge losses from the ban of exports, primarily in their image and breaking into foreign markets will be again be very difficult.
If the Russian millers are not be able to return to the markets, the development of flour mills in Kazakhstan is to flourish, due to convenient transportation system in relation to major markets, and it will occupy a vacant niche. But exports will not be noticeable for domestic consumption, because in 2009 exports totaled about 390 thousand tons in the production of more than 10 million tons. "

http://www.rian.ru/economy/20110111/319959496.html

In this case, January 1 was the only day on which the export of grain was allowed under the temporary embargo. The fact that one government decree established the embargo until 31 December 2010, and his second lasted only from January 2, 2011. In the past agricultural season (from July 2009 to July 2010) Russia exported 21.4 million tons of grain, and since the beginning of the new season August 15, exported about 3 million tons.

Last year’s natural disasters damage makes up $ 130 billion

http://english.ruvr.ru/2011/01/11/39273208.html

Jan 11, 2011 11:49 Moscow Time

Last year natural disasters throughout the world did damages to the tune of 130 billion dollars. According to estimates by the German “Munich Re” Reinsurance Company, 2010 has made it to the six most destructive years in the last 30 years. Some of the more terrible disasters are the quakes in Haiti and Chile, a flood in Pakistan, drought and wildfires in Russia, and also the volcanic ash cloud that brought air traffic in Europe to a halt. Besides, last year proved the warmest in the 130 years of weather observations. 
January 11, 2011 09:25

Banks have 992.0 bln rbs on CBR correspondent accounts on January 11.

http://www.interfax.com/newsinf.asp?id=213835

MOSCOW. January 11 (Interfax) - Russian banks have 992.0 billion rubles on correspondent accounts in the Central Bank as of January 11 including 741.1 billion rubles for Moscow banks

The balance on December 31 was 888.3 billion rubles and 580.1 billion rubles, respectively.

Banks had 633.2 billion rubles on deposit accounts in the Central Bank on January 11 against 569.6 billion rubles on previous day.

Bank of America, Credit Suisse Advise Russia on Finance Center

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ajiymhzJsMVc

By Ilya Arkhipov and Lyubov Pronina

Jan. 11 (Bloomberg) -- Bank of America Corp. and Credit Suisse AG are among banks that will advise Russia on creating a global financial center in Moscow, said Alexander Voloshin, head of the government working group overseeing the effort.

Societe Generale SA, UniCredit SpA, Nomura Holdings Inc., Ernst & Young and KPMG International will also join the advisory board, Voloshin said in an interview. OAO Sberbank and VTB Group, Russia’s two biggest banks, Moscow-based investment bank Troika Dialog and development bank VEB will also be represented.

“We chose those that have experience in launching big projects,” said Voloshin, 54, who served as chief of staff to former Presidents Vladimir Putin and Boris Yeltsin. “And those big banks that can bring business here.”

President Dmitry Medvedev signed a decree creating the panel on Dec. 29 after outlining plans to turn the Russian capital into a global financial center to help diversify the economy and reduce its reliance on energy exports. Moscow ranked 68th of 75 cities in the December 2009 Global Financial Centers Index commissioned by the City of London.

“We want to build an open economy,” Voloshin said in Moscow. “Developing the financial center will mean integration with Europe and into the global economy.”

Medvedev, 45, first announced the financial center plan in 2008. In June, he instructed the government to improve Moscow’s transportation and make legal adjustments so that investors feel “no less comfortable than in London, Geneva or New York.”

‘Star Team’

Medevedev named Voloshin to head the government working group on the financial center in July. The panel will work on proposals to improve infrastructure, financial and tax laws, reduce red tape and promote Moscow abroad. The advisory board will meet once or twice a year to discuss strategic issues.

“It’s a star team, to meet more often would be difficult,” Voloshin said. “We want them to help us and be our consultants on what to do and how to move forward.”

The push to turn Moscow into a financial center will depend on the willingness of major Russian companies to hold initial public offerings at home, Voloshin said.

The biggest Russian IPO of 2010 took place in Hong Kong, when Moscow-based aluminum producer United Co. Rusal raised $2.24 billion in January. Mail.ru Group Ltd., a Russian investor in Facebook Inc., raised $1 billion in London in November.

$1 Billion IPO

A $1 billion IPO by “a good, big” company could be a starting point, Voloshin said.

“We haven’t had a single major IPO on the Russian market,” Voloshin said. “If in a year or two we manage to hold a large IPO at home, and two to three a year later and then five to seven, it will in some respect indicate that Moscow is becoming a global financial center.”

VTB Capital, the country’s biggest equity underwriter, expects Russian companies to raise as much as $28 billion through public share sales this year, the most since 2007. Russia’s Micex Index has more than tripled since plunging as much as 74 percent in 2008.

Voloshin, until recently chairman of OAO GMK Norilsk Nickel, also helped reorganize Russia’s electricity industry as chairman of RAO Unified Energy System, the former state utility monopoly, along with Chief Executive Officer Anatoly Chubais.

“One should not expect a revolution,” Voloshin said. “But what we can do is to create a positive dynamic. There are issues that haven’t been under consideration for 10 to 15 years and haven’t been resolved for various reasons.”

To contact the reporters on this story: Ilya Arkhipov in Moscow at [e-mail]; Lyubov Pronina in Moscow at [e-mail]

To contact the editor responsible for this story: Willy Morris at [e-mail]

Last Updated: January 11, 2011 00:20 EST