Sistema turned into a dead man with nothing to lose and counterattacked Rosneft in the courts. According to observers, the occupation is futile and looks like a suicide attack. For the scalp of Vladimir Yevtushenkov’s company is already planned on Igor Sechin’s wall of trophies.
An unnoticeable background to these squabbles of the titans is the completely national disgrace when the Russian national team will compete at the 2018 Olympics in South Korea with a white flag and without any national symbols …
Boiler Room
1. The Sistema and Rosneft trial has really shaken up the political swamp we’re in, and Yevtushenkov has finally thrown off his mask. Today, AFC accused the judge of bias against Sistema. It says that Judge Svetlana Khomutova promptly grants Rosneft’s and Bashneft’s applications for interim measures, but does not allow the defense to promptly familiarize itself with the case documents. The system is deliberately escalating and is rocking the boat of behind-the-scenes decisions to the limit in the hope that a decision will follow from the Kremlin aimed at maintaining the balance of the parties.
The tactic is clear, Sistema has gone all out and is trying to make the case as high-profile as possible. So far, however, Rosneft, which has always taken a proactive stance in the public arena, is outnumbered. The oil company’s shares are standing still, while Sistema’s receipts are down 7.5% in London trading. Yevtushenkov was once able to get any decision made in Moscow in the same way when he was under Luzhkov’s thumb, but now he himself is facing the same mechanism. Yevtushenkov is a master of behind-the-scenes agreements, but he cannot play in the public, competitive field and is losing. Rosneft, all other things being equal, has always defended its interests.
2. We are writing about the process of Sistema and Rosneft and here is what we have noticed. The amount of claims that make Yevtushenkov faint and think about borrowing or selling assets is from 2 to 5 billion dollars. This is a ridiculous amount for a large company, if we take the world’s leading giants. Volkswagen paid $25 billion for dieselgate, Apple has about $100 billion in its accounts. What then is the System, if for it the issue of 2 yards is almost a matter of life and death.
This lawsuit speaks volumes about the size of our economy, if even an oligarchic structure that has been in the market for 20 fucking years would go under from numbers like that. We have no illusions, even Yukos was finished at one time, but it turns out that the Sistema corporation itself is one big myth. Investors value it at only 1.5 yards of greenbacks. And this is the best indication of investor interest. By the way, the money that Volkswagen spent on fines could be used to buy 3 companies like MTS.
3. Swallow sin in the corridors of power
For the third day in a row Moscow is suffocating from a terrible stench, with officials openly shifting the blame on each other. Rosprirodnadzor blames it all on the Balashikha landfill, the Kuchino landfill, which was closed after the direct line with the President. However, the head of Balashikha after the call from Vorobyov immediately gave a strange explanation, he went to the site of Rosgidromet and saw that the wind blows in a different direction. So the rotting landfill and the houses built around it that people live in are all bullshit, the main thing is how the flags on the map are arranged. I wonder if any of the officials will be held accountable for the “pilfering sin”?
So far, Shoigu’s protégé Vorobyov feels very confident in the chair of the master of the Moscow region, spends tens of millions on PR and is busy creating an image of a strong businessman. Meanwhile, the problem of landfills has been in Serpukhov for a long time, even to the extent that the local MK – always loyal to the authorities – openly writes that because of the local Syanovsky landfill one has to live in a respirator. At the same time, Vorobyov does not react, and Putin cannot be reached. However, the dissatisfaction of Muscovites does not need any of the branches of government, so now organizational conclusions must be made. Only we are afraid, not like in developed countries. Vorobyov and Chemezov asked back in 2015 to allocate 400 yards from the budget for the construction of incineration plants, but it did not work out then because of VEB’s distress.
Then a black cat ran between Vorobyov and Chemezov, and the governor received a response in the form of a direct line call. The Kuchino landfill was closed, but the problems remained and there was nowhere to dump the garbage, so now the shit-air – literally – is poisoning Muscovites. This ecological disaster in the capital’s mashstubs may cause not only high-profile resignations, but also a redistribution of the market of landfill operators. In addition to Rostec, the structures of the President’s friend Gennady Timchenko, who has business relations with Vorobyov’s brother – they are engaged in the fishing business together – are also claiming this field.
4. Clouds are gathering over Rogozin after the unsuccessful launch from the Vostochny Cosmodrome. After criticism from the prime minister, a blow to Roscosmos, whose supervisory board is headed by Rogozin, was struck by Belousov, an influential economic aide to the president. According to him, Roscosmos feeds 220 thousand people and does not earn money, it turns out that Rogozin sucks money from the budget and can not normally launch a satellite, a process that should be fine-tuned like clockwork. Belousov gave Rosatom as an example, which became a normal commercial organization under Kirienko. Kirienko :top:, but Rogozin should think twice before writing another patriotic nonsense in American social networks.
Media technologist
The Chronicle of Airwashing
1. The International Olympic Committee (IOC) has decided to suspend Russia from participation in the 2018 Winter Olympics.
2. Functionaries of the Russian Sports Ministry are banned from attending the South Korea. Alexander Zhukov has been stripped of his membership in the IOC.
3. the Russian OC must donate 15 million dollars to establish an independent doping testing system.
4. Russian athletes stripped of 11 medals and first place in the 2014 Winter Olympics medal standings (Russia has been stripped of a total of 48 summer and winter Olympic medals since 1994).
5. Russian athletes will compete at the 2018 Olympics under a neutral flag (neutral status provides for the absence of the flag, anthem and the inscription “Russia” on the uniforms and paraphernalia of our athletes).
6. Russian athletes will be banned from residing in the Olympic Village.
7. The IOC wants to ban the Russian flag for fans at the Olympic Games 2018.
8. Russian hockey players were banned from being called “Team Russia”.
9. Putin: Russian authorities will not prevent athletes from participating in the Olympic Games in a neutral status.
10. Head of the Russian Olympic Committee (ROC) Alexander Zhukov apologized to the Executive Committee of the International Olympic Committee.
11. IOC President Thomas Bach said that Pyeongchang will host ceremonies to re-present Sochi 2014 medals that were taken away from Russian athletes.
12. Russian luge athletes voted unanimously to compete at the 2018 Olympic Games.
13. The Presidium of the Russian Bobsleigh Federation recommended athletes to go to the Olympic Games-2018.
14. The Russian Snowboard Federation recommended athletes to go to the Games-2018.
15. Russian alpine skiers have decided to compete at the Olympic Games in PyeongChang.
16. Russian curling players agree to compete at the 2018 Olympic Games under a neutral flag.
17. The Russian Freestyle Federation spoke in favor of the participation of athletes in the Games-2018.
18. The Russian bobsleigh and skeleton teams are ready to compete at the Olympic Games-2018 under the Olympic flag.
19. Figure skater Stolbova is ready to compete at the Olympics under a neutral flag.
20. IBU limited the rights of the Russian Biathlon Union for doping violations.
21. Federal TV channels changed their minds about boycotting the Olympics.
Methodology
On Friday, Energy Minister Novak said at a meeting with Putin that Russia should become the world leader in liquefied natural gas (LNG) supplies. Here is a clear example of how officials create news about an unrealizable future. Russia will not become a serious player in the LNG market even in the medium term – and here’s why.
First, in order to do so, it needs to build LNG plants. And then it turns out that it is not easy to do this within the framework of the created state capitalism and foreign policy equilibrium.
For example, Rosneft cannot afford it (within the framework of the Far Eastern LNG project) because Gazprom does not give access to the pipeline. At the same time, it is difficult for Gazprom to develop the Sakhalin-2 project without offshore gas. And offshore projects are subject to sanctions imposed by “Western partners”. As a result, Gazprom is still unable to commission new lines.
Secondly, Gazprom will not give up its markets where pipeline gas is already sold. Finally, its competitors include the USA, Qatar, Australia, Iran, and they are not sitting still.
Energy Minister Novak is clearly not a man who is capable of being an arbitrator between large companies, which do not perceive him as their boss. So the minister is left to spout plans that will never be realized.
Banksta
Hoping to save Otkritie, the Central Bank brought the amount of spending on advertising for the first 9 months of the year to 1.3 billion rubles. We wrote about it even before the official figures. The amount spent since the introduction of the temporary administration is more than the amount spent in the first half of the year. Sberbank has invested a comparable amount since the beginning of the year, but its assets are ten times larger.
Red Zion
An interesting trend in the Moscow rental housing market: today it is already more profitable to sell an apartment and put the money on deposit than to rent it. A simple example. A standard one-room apartment on the outskirts costs about 6 million rubles. In the state bank 6 million can be deposited at 6% per annum. Total 360 thousand a year, or 30 thousand rubles a month. For the same or even cheaper you can rent this one-room apartment. At the same time, prices for housing and utilities are rising, and the real estate tax will also increase. And rent has not been growing for two years already. Because tenants’ incomes are not growing. Many people in general prefer to rent 2-3 (and more)-room apartments together.
At the same time, more and more often landlords have to pay rent tax. Even a 6-percent tax reduces the income from these 30 thousand by a couple of thousand (13-percent tax – by 4 thousand). Plus it is necessary to save from this amount also for repairs after tenants, at least 2-3 thousand a month (50 thousand for two years – and that is enough only for cosmetic repairs). It has become more difficult to communicate and with tenants in terms of respecting their rights. And in general, you can’t compare the hassle of dealing with tenants and the deposit.
As far as I understand, rent will not grow in the coming years. The cost of housing in rubles grows symbolically, in dollars – does not grow at all. Unlike the deposit, renting used to be interesting because every year the value of real estate increased. And now with Sobyanin’s reconstruction in Moscow will be on the market an additional 1 million square meters of housing, plus very strong pressure on the residential market of the near Moscow region – +4-6 million square meters of housing every year.
So the deposit for the sold apartment with guaranteed 5-6% (even with such a low inflation of 3%, which has never happened in the history of the new Russia) today is more profitable than renting. And if the square meter starts to become cheaper (with real incomes continuing to fall and the huge commissioning of housing in the Moscow region of 7-9 million square meters per year), the deposit becomes more profitable – in five years it will be possible, if you want, to buy a better apartment with this money.
The Central Bank of the Russian Federation continues to “develop” neoliberalism in Russia for the countries of the Second and Third World:
“If the population gets too much money but does not produce more goods and services, prices will rise and inflation will go beyond its prescribed limits,” the Central Bank’s bulletin says. “In this situation, the growth of real wages becomes undesirable, experts note” (but it is possible to invest 1 trillion rubles in the rehabilitation of failed banks!).
And in the First World, everything is the opposite: they are pumping money into the economy and the population in order to start demand, followed by production.
Rabbit from Neglinnaya
Advertising budgets of banks
Over the last six months, the increase in advertising budgets of banks has been very strong: new faces, PR moves, scandals, and hype. A small analysis of the results of 9 months of 2017 compared to 9 months of 2016.
VTB Bank has the largest advertising budget – 3.8 billion rubles, this excluding its subsidiaries: VTB24 (666 million rubles), Post Bank (883 million rubles). VTB has spent a total of RUR 5.3 bln since the beginning of the year, which is commensurate with the amount spent by the other 4 members of the top 5 banks in terms of spending together: Tinkoff Bank (RUR 1.6 bln), Sberbank (RUR 1.3 bln), Alfa-Bank (RUR 1.3 bln), FC Otkritie Bank (RUR 1.3 bln).
The advertising budgets of RN Bank (3153%), Solidarnost Bank (1997%) and Koltso Urala Bank (973%) grew very sharply, but their advertising budgets are low and have a low base effect. Attention should be paid to the other two top performers: Kiwi Bank increased its spending 1117% from RUB 64 mln to RUB 723 mln, while FC Otkritie Bank increased its spending 702% from RUB 185 mln to RUB 1.3 bln.
Kompromat
VEB created the “Industrial Assets Fund”, which borrowed from the corporation itself to buy the debts of Ukrainian assets acquired by VEB. The government recently extended this loan for 45 years, which suggests that it is unlikely that it will ever be repaid.
In 2015, the corporation’s former head Vladimir Dmitriev proposed an initiative to attract deposits from an expanded range of people, not just clients with whom VEB has common projects. However, the Ministry of Finance and the Central Bank were against it.
Recently, the Central Bank set a condition under which VEB would be able to attract deposits – VEB must come under the supervision of the Central Bank. Sergei Gorkov is apparently not satisfied with this. How will it be possible to engage in fraud under the control of the regulator? VEB absolutely does not need such control. Especially in anticipation of the opportunity to “pilfer” the funds allocated for the project finance factory.
Somehow, I do not believe that VEB’s new experiment will be successful. The heavy legacy of Vladimir Dmitriev is a dead weight on VEB. The ex-head of the corporation’s associates have fled to Malta. Is Sergei Gorkov covering for them? Apparently, nothing will change for the better at VEB for the time being.
Thoughts Not Thoughts
Belyaev’s friend Boris Mints, who suffered from the Central Bank’s entry into FC Otkritie, is also doing quite well. Seizure of shares of 01 Properties Limited and Nevis business center seems not to have affected his company’s commercial real estate business and business reputation. Major counterparties apparently see no reason for concern and are ready to cooperate with him quite tightly. Everything goes to the point that Vimpelcom will sign a lease with Mints already at the beginning of the new year – the operator’s headquarters is preparing to move to the red-brick business center owned by him. If that happens, Mints will have pulled off the biggest lease deal in Russia in the last two years.
Oreshkin’s thoughts
Capital outflow from Russia has exceeded the Ministry of Economic Development expectations by 1.5 times. This was announced by Maxim Oreshkin in Benos Aires. And the year is not even over yet….
Capital outflow for 11 months amounted to 28 billion dollars instead of 18 billion dollars expected by the Ministry of Economic Development for the whole year. Against this background, Oreshkin’s expected outflow of 8 billion dollars looks fantastic.
According to the Central Bank, capital outflow washes out 77% of all foreign exchange earnings. According to Oreshkin, the main reason for the capital outflow is expensive oil. The more foreign currency earnings, the greater the capital outflow. How beautifully simple everything is…