Military Forum for Russian and Global Defence Issues


    Russian Economy General News: #5

    Share

    Vann7

    Posts : 3875
    Points : 3979
    Join date : 2012-05-16

    Re: Russian Economy General News: #5

    Post  Vann7 on Fri Dec 18, 2015 11:54 pm

    kvs wrote:http://www.sdelanounas.ru/blogs/71620/




    Samsung has localized 50% of its Russian market production.

    Ruble devaluation is very good for Russia.   It baffles me how forex speculators could be handing Russia such a gift.  
    Their fixation on Russia being some one-commodity banana republic is epic in its inanity and they are so blinded by
    their chauvinist retardation that they more than offset the oil price drop with the forex devaluation.


    Question for you..

    I was reading this report..

    http://russia-insider.com/en/inflation/ri11913

    That even though it was very negative and doom for Russia future economy..the methodology
    used to measure real inflation raise in Russia seemed valid and interesting. Compared the prices of a traditional market store in Russia ,and buying the same products and compare the prices.

    ok.. regardless if the article is correct or misleading.. (read the poster comments below)

    Correct me if im wrong..

    But inflation in Russian food generally speaking only happens because Foreign products raise the prices to compensate for Ruble devaluation? so they are paid about the same price as before when using the Ruble convert to their currency..

    So the question is.. all that Russia needs to do to stop for real ,the food inflation is to no longer import food from abroad ? and produce all its food internally? all tomatoes ,Rice,meat ,chicken,eggs and dairy ,to produce all that in Russia? and not import any food from abroad?

    In other words if Russia was very strong food producer nation ,and produced everything inside
    Russia to cover all its needs.. then inflation will have not happened ,will not be news at all ,regardless if Ruble was 70 or 80 or even 90 to dollar?

    and same question for technology ,(although this came take a couple of decades for Russia to be fully self suficient in all tech) . If Russia produced 100% of what it consume ,the essentially
    Russia could be immune to inflation no matter the rate value of Ruble vs Dollar?

    avatar
    kvs

    Posts : 3757
    Points : 3856
    Join date : 2014-09-11
    Location : Canuckistan

    Re: Russian Economy General News: #5

    Post  kvs on Sat Dec 19, 2015 12:10 am

    Yes, imports are the sole real causal factor for inflation associated with devaluation. But there is also the
    speculator opportunism syndrome. When prices start to go up for some goods then there is a strong incentive
    by merchants to jack up prices on all goods. It is pure abuse of the market, but the consumer is typically
    clueless and does not have the iron will to break the merchant, especially when the price rise is incremental.
    Iron willed, informed consumers would routinely boycott all vendors who misbehaved, en masse, and
    would either drive them out of business or force them to behave.

    Vann7

    Posts : 3875
    Points : 3979
    Join date : 2012-05-16

    Re: Russian Economy General News: #5

    Post  Vann7 on Sat Dec 19, 2015 1:03 am

    kvs wrote:Yes, imports are the sole real causal factor for inflation associated with devaluation.   But there is also the
    speculator opportunism syndrome.   When prices start to go up for some goods then there is a strong incentive
    by merchants to jack up prices on all goods.   It is pure abuse of the market, but the consumer is typically
    clueless and does not have the iron will to break the merchant, especially when the price rise is incremental.
    Iron willed, informed consumers would routinely boycott all vendors who misbehaved, en masse, and
    would either drive them out of business or force them to behave.  


    Then all this means that Russia needs to seriously move its economy into the food business
    and agriculture business. Also it needs to fully develop its own internal tourism. IM surprised
    why Russia did not think earlier about being self sufficient food export nation. There is no reason for Russia to be buying chicken in US or Argentina or Brazil across the globe.  No

    What i will do if was Putin is create an industrial revolution in Russia.

    1)90% total import substitution of food ,
    2)develop and promote that 90% of Russians do tourism internally and not abroad.
    3)50% to 80% technology import substitution
    4)Progressive tax , people who earn more higher tax.. people who earn less lower tax.
    (no idea if this is possible).
    5)cut all federal employeers income by 20% including Government ,freeze any salary increase
    until recension ends.
    6) Cut the spending in Sports and significantly reduce entertainment activities financed by kremlin
    7)allow prisoners to work for free or for very little in change for 10 hours away of jail.
    Cool Low tax for foreign companies creating jobs in Russia to attract investment.
    9)Defense Budget to not touch it.. if any if needs to be increase a bit more.
    10) Space program significantly increase its budget ,all those things creates unity and
    helps innovation , technology development and nation image. Push Russia to become the leader in Space not only transportation but planets missions. and more than anything Get to the moon as fast as possible and deploy a base there. Nothing in the world ,attract more investors to a nation that to "steal the show" and show an image of high development and being leaders in space.
    11)Russia should really push for the new internet ..with China. and become really strong
    in semiconductor industry and software development. an IT and Semiconductor revolution.
    This new internet could operate independently of today internet but also could connect to it too.
    12)Entertainment.. Russia should push the video gaming Industry.. is today the biggest business in entertainment today. even more than Holywood.

    China have a saying that the best way to promote the economy in any region is to build
    a good road. and thats exactly what Russia needs to invest.. improve its roads ,in key zones to promote creation of business. Once inflation controlled and low..Russia can decrease interest rates even more.

    The money that Russia will save in over spending and salary cuts in well paid people it can be used to create more jobs. Same with promoting tourism and More Space development. etc.
    Russia also can start to kick foreigners taking a job in Russia that could be given to a Russian citizen. Significantly reduce moldovans and Tajikistanis employment in Russia.. same with Europeans that move its earned money abroad. Only foreigners allowed to work in Government companies or construction should specialist ,engineers or scientist that cannot be replaced easily.
    avatar
    kvs

    Posts : 3757
    Points : 3856
    Join date : 2014-09-11
    Location : Canuckistan

    Re: Russian Economy General News: #5

    Post  kvs on Sat Dec 19, 2015 2:05 am

    The problem in Russia is that the Yeltsin era legacy was persistent. Putin is not the tyrant that NATO propagandists paint him
    as and he could not just decree that the economy changed to suit his policies. There was significant agricultural development
    after 2000 but the situation was that foreign imports were cheap enough to suppress domestic production. Pure market economics
    at play and due to the distortion resulting from Yeltsin and the voodoo monetarist economics of the 1990s. Thanks to the ruble
    devaluation, the log jam, so to speak, has been broken. The foreign food imports are now too expensive and also the sanctions
    war has outright banned them from the domestic market. It is already possible to see significant import substitution and the process
    will continue and not just for food but for many other goods. So NATO has shot itself in the head as far as damaging Russia's economy
    is concerned. NATO's retarded sanctions have been a total blessing for Russia and are putting the final nails into the warped legacy of
    Yeltsin The Comprador.
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 3:27 am

    kvs wrote:The word fruitloop is on the mark.   One would expect 20% growth in trade if the GDP grew by 20%.  So a 3% growth is actually quite
    good considering that supposedly the Russian GDP is supposed fall by 5% in 2015 (according to Moody's and friends).  

    The drop is actual 3.8 - 3.9% of GDP. At least so far from what is calculated. But your basis is correct. A growth during a period of a downturn or adjustment is actually pretty good. And as already mentioned, the growth at seaport is pretty good since Russia is a land trade based nation.

    Austin

    Posts : 6837
    Points : 7226
    Join date : 2010-05-08
    Location : India

    Re: Russian Economy General News: #5

    Post  Austin on Sat Dec 19, 2015 7:04 am

    http://www.vedomosti.ru/economics/articles/2015/12/14/620769-vtoraya-volna-krizisa-shokovie-stsenarii-2016-god-mogut-stat-bazovimi

    The annual average price of oil at $ 35 per barrel, the decline in the economy by 2-3%, continued investment slowdown, the slow decline in inflation - up to 7% by the end of 2016, falling real wages comparable with 2015 rates (January - October 2015 . almost 10%) with an increase in unemployment - these are the parameters of risk scenario, the Central Bank in 2016 "Last dynamics of oil prices suggests that the relevance of this scenario has increased", - said chairman of the Central Bank, Elvira Nabiullina.

    According to Finance Ministry estimates, the average annual decline in prices to $ 40 per barrel in 2016 to increase the budget deficit to 5.2% of GDP, the reserve fund is exhausted for the year almost completely. According to the forecast of Economic Development, at a price of oil the economy will shrink by 1%, the average dollar exchange rate will be 72.6 rubles., The decline in real wages and incomes will continue.

    Austin

    Posts : 6837
    Points : 7226
    Join date : 2010-05-08
    Location : India

    Re: Russian Economy General News: #5

    Post  Austin on Sat Dec 19, 2015 7:08 am

    Looks like Russian Economy are preparing 2 scenario Ural at $40 and $35 , The FM is predicting more bleeker $30 situation , In all scenario GDP will shrink some percentage.

    Also Putin mentioned he would look into selling 19.5 % stake in Rosneft will would fetch around $7 billion atleast to not use money from Reserve Fund , may be they want to cushin some money in Reserve Fund for 2017.

    Ofcourse the best scenario is for $50 Oil on which budget is based.

    But Kremlin Economist spoke of getting prepared for $40 Oil for next 6-7 years , Though I think its overly pessimistic but better to be prepared then be caught by surprised.

    I think a $40 Oil is good for Russian Economy in long run. they will have to reform structurally introduce higher taxes , privatise some state funded companies and cut some budget expenditure some where , bitter pill but in long run Russian Economy will be much less depended on Oil Shock

    Austin

    Posts : 6837
    Points : 7226
    Join date : 2010-05-08
    Location : India

    Re: Russian Economy General News: #5

    Post  Austin on Sat Dec 19, 2015 7:17 am

    Moscow, Beijing agree deals worth up to $5bn

    Austin

    Posts : 6837
    Points : 7226
    Join date : 2010-05-08
    Location : India

    Re: Russian Economy General News: #5

    Post  Austin on Sat Dec 19, 2015 9:11 am

    Privatization of state corporations could solve number of problems in Russian economy

    http://tass.ru/en/opinions/845412
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 5:24 pm

    Austin wrote:http://www.vedomosti.ru/economics/articles/2015/12/14/620769-vtoraya-volna-krizisa-shokovie-stsenarii-2016-god-mogut-stat-bazovimi

    The annual average price of oil at $ 35 per barrel, the decline in the economy by 2-3%, continued investment slowdown, the slow decline in inflation - up to 7% by the end of 2016, falling real wages comparable with 2015 rates (January - October 2015 . almost 10%) with an increase in unemployment - these are the parameters of risk scenario, the Central Bank in 2016 "Last dynamics of oil prices suggests that the relevance of this scenario has increased", - said chairman of the Central Bank, Elvira Nabiullina.

    According to Finance Ministry estimates, the average annual decline in prices to $ 40 per barrel in 2016 to increase the budget deficit to 5.2% of GDP, the reserve fund is exhausted for the year almost completely. According to the forecast of Economic Development, at a price of oil the economy will shrink by 1%, the average dollar exchange rate will be 72.6 rubles., The decline in real wages and incomes will continue.

    The same people predicted that GDP will drop by 4% and more, are now wrong. And so far it dropped even less.

    I would like to see where it stated that real wages dropped by 10%. Companies didn't reduce pay to people. So it would be in the form of inflation is the only reason why I can imagine. Same people even tried to compare foreign exchange rate to loss in real wages, which is definitely not how it is supposed to be done.

    Russia will end up reducing budget and gain more money from sales of their state companies, but I think that as soon as things get better, they need to purchase back those state companies, simply because they are great leverage as well as privatization in the past caused a lot of issues overall for Russia.

    Of course, what their claims are, are simply predictions. Cant blame them. But at the same time too, throwing pessimistic columns out cause a lot of damage too.
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 6:09 pm

    Foreigners Invest 140 Bln Rubles in Russian Bonds in 2015
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 6:20 pm

    Accounts Chamber head: Russian economy can smoothly pass through 2016
    Golikova said that in the near future the Economic Development Ministry will present an updated macroeconomic forecast.

    "When it [the ministry] updates it, it will be unrealistic again. I'm not offending my colleagues, but we should stop revising the situation over and over again and stop at what we have. It is most likely that we will be in the situation which is more critical that it is in the forecast," Golikova said.

    She also said the authorities should "stop scaring people with forecasts".

    "It is necessary to wait for the outcome of 2015, to evaluate all the risks. Performing a budget cut by 5% again — that will be destructive, why should we fall into the same trap? We should work, at least the first quarter we should pass working with the budget that was approved," Golikova said.
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 6:35 pm

    The gold reserves of Russia for November increased by 21.7 ton
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 6:40 pm

    Russia has reduced imports of PVC 3 times, the export has increased by 6 times

    During 11 months agricultural production in Russia grew by 2.9% in November - 2.3%

    import-export of agricultural and chemical industry
    avatar
    kvs

    Posts : 3757
    Points : 3856
    Join date : 2014-09-11
    Location : Canuckistan

    Re: Russian Economy General News: #5

    Post  kvs on Sat Dec 19, 2015 7:06 pm

    sepheronx wrote:Accounts Chamber head: Russian economy can smoothly pass through 2016
    Golikova said that in the near future the Economic Development Ministry will present an updated macroeconomic forecast.

    "When it [the ministry] updates it, it will be unrealistic again. I'm not offending my colleagues, but we should stop revising the situation over and over again and stop at what we have. It is most likely that we will be in the situation which is more critical that it is in the forecast," Golikova said.

    She also said the authorities should "stop scaring people with forecasts".

    "It is necessary to wait for the outcome of 2015, to evaluate all the risks. Performing a budget cut by 5% again — that will be destructive, why should we fall into the same trap? We should work, at least the first quarter we should pass working with the budget that was approved," Golikova said.

    Indeed. There are too many defeatist hysterics in Russia from government to mass media who only do damage to Russia's
    GDP and image with their inane "the sky is falling" bleating. These morons need to find other jobs, ASAP. Any human
    with a normal level IQ should clue in that public speaking is not about venting all your phobias, delusions, and ignorance.
    The best policy is to keep your trap shut if you have nothing constructive to contribute.
    avatar
    magnumcromagnon

    Posts : 4472
    Points : 4631
    Join date : 2013-12-05
    Location : Pindos ave., Pindosville, Pindosylvania, Pindostan

    Re: Russian Economy General News: #5

    Post  magnumcromagnon on Sat Dec 19, 2015 7:20 pm

    Austin wrote:Privatization of state corporations could solve number of problems in Russian economy

    http://tass.ru/en/opinions/845412

    Yeltsin privatized a whole lot of state industries in the 1990's, yeah that turned out well... Rolling Eyes
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sat Dec 19, 2015 7:59 pm

    magnumcromagnon wrote:
    Austin wrote:Privatization of state corporations could solve number of problems in Russian economy

    http://tass.ru/en/opinions/845412

    Yeltsin privatized a whole lot of state industries in the 1990's, yeah that turned out well... Rolling Eyes

    Indeed. Hence why I don't think it is a good idea necessarily. But the parameter of what is viewed to be the privatization of Rosneft is actually sale of 19% or so of shares, which Russian government would still own majority shares it is believed. Thus they will still have say in the companies activities. For Aeroflot? Dunno. The cash injection from privatization is very low for short term compared to what would be gained from revenue in keeping it state run in long term.

    Russian President admits necessity to adjust 2016 budget due to decreasing energy prices

    "Most likely we'll be forced to review something here [in 2016 federal budget parameters - TASS] as well," he said at the annual press conference on Thursday. However, the president stressed that the Russian government would not be hasty in budget revision, getting prepared to any course of events.

    "Statistics show that the Russian economy as a whole has passed the peak of the crisis," he said, noting that since the Q2 of this year, "there are signs of stabilization in economic activity."

    In this regard, Putin noted that in September-October, the country’s GDP grew by 0.3 - 0.1% against the previous month. The volume of industrial production ceased to decline since May, and in September-October, the index started to increase, the president added.

    According to him, the Russian government expects 0.7% economic growth in 2016.

    "As of today the government expects to see economic growth at around 0.7% in 2016, at 1.9% in 2017 and at 2.4% in 2018. I’d like to attract your attention to the fact that everything is based on $50 per barrel. Now this level is lower," Putin said.
    avatar
    kvs

    Posts : 3757
    Points : 3856
    Join date : 2014-09-11
    Location : Canuckistan

    Re: Russian Economy General News: #5

    Post  kvs on Sat Dec 19, 2015 8:02 pm

    magnumcromagnon wrote:
    Austin wrote:Privatization of state corporations could solve number of problems in Russian economy

    http://tass.ru/en/opinions/845412

    Yeltsin privatized a whole lot of state industries in the 1990's, yeah that turned out well... Rolling Eyes

    Russia is still afflicted by the monetarist disease. Putin and Medvedev are believers at least in part.
    Kudrin was a foaming at the mouth monetarist and he was actually the minister of finance. All of these
    privatization suggestions will do little to help Russia's budget. We have an example of this in Ontario,
    Canada, where there is a never ending push to sell the LLCBO, the provincially owned liquor distributor.
    So let's say they sell it, then they gain X billion dollars but lose $1 billion in revenues per year. I do not
    see them selling the LLCBO for X where X = 100 and in fact X is likely to be under 5. That's just retarded.
    avatar
    GarryB

    Posts : 18348
    Points : 18908
    Join date : 2010-03-30
    Location : New Zealand

    Re: Russian Economy General News: #5

    Post  GarryB on Sun Dec 20, 2015 12:22 am

    Privatisation here in NZ has also been negative... years ago the government controlled telecom and the postal service and various other sectors.... the promise was always that privatisation would lead to more efficiency and reduced costs to the consumer.

    that always proved to be bollocks.

    An example was telecom... it was a huge organisation with too many employees that made a modest profit every year under government control. When privatised we were promised reduced prices and better services... of course it was immediately bought by a foreign company (I think they were canadian actually) and the first thing they did was fire the entire front line staff and hire back 1/3rd of the most competent. this means they were busy more of the time and at peak time the system just didn't work properly. In the first year of operations their profit was about three times more than they paid for the buying price... but for the government they got reduced income tax because the work force was reduced by 2/3rds and of course there were unemployment payments to be made for those temporarily out of work. I bet the CEO and other managers gave themselves fat bonuses for that...

    From a consumers perspective when you reduce the work force by 2/3rds service does not improve and to keep profits high for the share holders the prices don't reduce either...

    I don't think the government should be running everything, but I prefer bloated and inefficient to foreign owned siphoning money from our economy and firing kiwi workers and hiring other foreign companies to offer tech support because they are cheaper.

    Privatization of state corporations could solve number of problems in Russian economy

    Foreign ownership of Russian companies will create more problems than it will solve. A short term one off gain is no substitute for long term income and market control.
    avatar
    Walther von Oldenburg

    Posts : 977
    Points : 1034
    Join date : 2015-01-23
    Age : 27
    Location : Oldenburg

    Re: Russian Economy General News: #5

    Post  Walther von Oldenburg on Sun Dec 20, 2015 1:00 am

    Economy can be protected from this - just introduce some laws limiting foreign ownership of companies - to say 15% in regular companies and 5-10% in companies of strategic significance.

    Should work. Wink
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sun Dec 20, 2015 7:06 am

    Russian government has ownership of Rosneft of 69.5% of shares. They are looking to sell 19.5% of shares to someone else (chances are heavily the Chinese will buy it). That means Russia will have effectively 50% of shares or possibly 50% + 1 share (common for Russian government to do this) so that would indicate that Russian government would still have controlling shares and obtain at least 50% of the profit from it, while BP and China have the other portions of it (BP with 19.75%). I think that they should try to obtain some of those shares back from BP so that they can sell it to someone more reliable (possibly India's energy company or Vietnam's).

    As for Aeroflot, it is only 51% state owned. I cannot imagine selling any further shares is a good idea as Aeroflot is really Russia's remaining profitable airline company and privatization could drastically increase costs for people wanting to fly.

    Austin

    Posts : 6837
    Points : 7226
    Join date : 2010-05-08
    Location : India

    Re: Russian Economy General News: #5

    Post  Austin on Sun Dec 20, 2015 11:14 am

    Russia FDI flows tripled in first half 2015: OECD
    bne IntelliNews October 29, 2015

    A report by the Organisation for Economic Co-operation and Developments (OECD) shows foreign direct investment flows to Russia almost tripled in the first half of 2015 amid signs the economy is recovering and becoming an investment destination again.

    FDI flows rose to $12bn in the first six months from the very low level of just $4.7bn for the same period a year ago, according to the report published by the OECD on October 29.


    Foreign investment in Russia practically came to a shuddering halt last year as European and US companies and financial institutions froze new investments in the country after sanctions were introduced for the Kremlin's involvement in the armed conflict in East Ukraine. A collapse in the ruble and the price of commodities also conspired to push Russia into its first recession since 2009.

    Overseas investment in oil and gas, metallurgy, trade agriculture and real estate investment virtually ceased as companies decided to opt out rather than try to navigate the sanctions minefield.

    Data from the Central Bank of Russia (CBR) put capital outflows last year at $151bn compared to $61bn for 2013. The IMF predicts full year capital outflows of $113bn this year.

    Maxim Oreshkin, Russia's Deputy Finance Minister, told foreign investors on October 21 that the country is now emerging from its biggest crisis since the USSR was whip-sawed by the 1985 collapse in oil prices.

    Russian foreign debt has dropped 30% this year to about $500bn from $700bn, despite economic sanctions and the recession. The current account and fiscal balances improved this year even as oil prices declined two-fold.

    A new agreement brokered in Paris on October 2 to hold elections in East Ukraine, along with a ceasefire and a continuing withdrawal of weapons from the front lines, boosted hopes that Russian companies will allow to tap international capital markets again. Gazprom and Norilsk Nickel have already succeeded in raising over $2bn in the first deals in 11 months, while the sovereign is eyeing a $3bn Eurobond for early next year.

    Corporate profits are now growing at "double-digit rates" because of nominal wages growing at a much lower rate, Oreshkin said. This is translating into a bottoming out of the negative GDP trend. "We plan to have positive quarter-on quarter positive growth in Q4 and next year we expect to see 0.5% growth," he told delegates at the RussiaTalk forum on October 21. The government is seeing the return of foreign capital "after the shocking events of the last 18 months", the deputy minister emphasised.

    "We see the resumption of syndicated lending of Russian borrowers, capital inflow to subsidiaries of foreign companies for new investments as well as investments of British investors in Russian debt securities," Oreshkin said.
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sun Dec 20, 2015 3:53 pm

    http://tass.ru/en/politics/845549

    Head of Crimea made a claim that they did not recieve one kopek from the federal government, but the federal government made their statement back at him.  Apparently back in November, there was consern regarding head of Crimea's efforts in the region and that he was very ineffective.

    par far

    Posts : 1741
    Points : 1914
    Join date : 2014-06-26

    Re: Russian Economy General News: #5

    Post  par far on Sun Dec 20, 2015 6:58 pm

    sepheronx wrote:Russian government has ownership of Rosneft of 69.5% of shares.  They are looking to sell 19.5% of shares to someone else (chances are heavily the Chinese will buy it).  That means Russia will have effectively 50% of shares or possibly 50% + 1 share (common for Russian government to do this) so that would indicate that Russian government would still have controlling shares and obtain at least 50% of the profit from it, while BP and China have the other portions of it (BP with 19.75%).  I think that they should try to obtain some of those shares back from BP so that they can sell it to someone more reliable (possibly India's energy company or Vietnam's).

    As for Aeroflot, it is only 51% state owned.  I cannot imagine selling any further shares is a good idea as Aeroflot is really Russia's remaining profitable airline company and privatization could drastically increase costs for people wanting to fly.


    Why is the Russian government looking to sell 19.5% of shares of Rosneft? Is it not better to hold onto to them, I don't get this.
    avatar
    sepheronx

    Posts : 7111
    Points : 7383
    Join date : 2009-08-06
    Age : 29
    Location : Canada

    Re: Russian Economy General News: #5

    Post  sepheronx on Sun Dec 20, 2015 8:23 pm

    Nothing is set yet. But they wanted to sell it for quick cash and to give a bit more openess to Rosneft for future projects (other share holders will bring possibly more investment money to keep making more money.

    Sponsored content

    Re: Russian Economy General News: #5

    Post  Sponsored content


      Current date/time is Tue Oct 16, 2018 4:52 am