Russia Says Ukraine Preparing New Offensive Against Separatists
MOSCOW — Russia’s foreign minister Sergei Lavrov said on Monday he suspected Ukraine was preparing a new offensive against pro-Moscow separatists in east Ukraine following an upsurge in fighting. Clashes near the port city of Mariupol and the rebel-held town of Gorlivka have put further strain on a fragile ceasefire between Ukrainian government forces and the separatists. "We are worried by the developments in recent days which strongly recall preparation for more military actions," Lavrov told a news conference, accusing Kiev of breaking the terms of a ceasefire. "It was like that in August last year when Ukrainian soldiers received the order to attack. … It was like that in January of this year. One shouldn’t be experimenting and trying one’s luck, one should simply fulfill what was agreed in Minsk." Both sides have withdrawn artillery guns, tanks and other heavy weapons under the terms of the Minsk peace […]
Russia: Economy Shrank 4.6 Percent In Q2
The Russian economy shrank 4.6 percent in the second quarter of 2015, according to official government figures released Aug. 10, the Moscow Times reported. The Russian ruble also weakened, dropping below 64 rubles to the U.S. dollar. The economy, which has been harmed by low oil prices and Western sanctions stemming from the conflict in eastern Ukraine, has slipped into recession for only the second time in President Vladimir Putin’s 15 years in power. The Kremlin is growing concerned that the economic crisis will translate into regional defiance or mass protests . Stratfor provides global awareness and guidance to individuals, governments and businesses around the world. We use a unique, intel-based approach to analyze world affairs. Copyright © 2015 Stratfor Global Intelligence, All rights reserved. Our mailing address is: 221 West 6th Street Suite 400 – Austin, TX 78701, USA unsubscribe from this list update subscription preferences | forward […]
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Sberbank Slumps as Russia Turmoil Crimps Lender’s Profitability
OAO Sberbank declined the most in a week, extending its slump from this year’s high to 24 percent, as a weakening ruble, international financing restrictions and higher loan provisions worsen the outlook for the Russian bank’s profits. The American depositary receipts dropped 4 percent to $4.81 in New York on Tuesday. A Bloomberg gauge of U.S.-traded Russian stocks slid 1.7 percent. Sberbank, which holds about half the nation’s deposits, tumbled 69 percent in 2014 as oil prices plunged and the state-controlled bank was cut off from U.S. and European credit markets under sanctions linked to the Ukraine conflict. Sberbank, widely seen as a proxy for Russia’s economy, has been squeezed by high borrowing costs, while a slump in oil, the nation’s biggest export, exacerbated the impact of the international sanctions, pushing the country into its first recession since 2009. Even though the central bank has been reducing interest rates […]
U.S. sanctions put Gazprom-Shell alliance plans in jeopardy
Shell branding is seen at a petrol station in west London, January 29, 2015. Royal Dutch Shell’s plans to build a strategic alliance with Russia’s Gazprom could be in jeopardy after the United States added one of Gazprom’s biggest gas fields to its list of Russian sanctions on Friday. Shell and Gazprom signed an agreement in June to develop a strategic alliance in the gas sector, ranging from upstream – exploration and production – to sales, including possible asset swaps. Development of the Yuzhno-Kirinskoye field on the island of Sakhalin in the Pacific, a project known as Sakhalin-3, has been seen as central to that alliance as it would allow the two companies to expand their sole existing LNG venture, Sakhalin-2, located nearby. State-owned Gazprom was believed to be considering selling a stake in Sakhalin-3 to Shell, which confirmed only last week that it was interested in buying a […]
Russian GDP Plunges 4.6%
Russia’s economy shrank the most since 2009 after a currency crisis jolted consumer demand, while a selloff in oil threatens to drag the country into a deeper recession. Gross domestic product contracted 4.6 percent in the second quarter from a year earlier after a 2.2 percent decline in the previous three months, the Federal Statistics Service in Moscow said on Monday, citing preliminary data. That was worse than the median forecast for a 4.5 percent slump in a Bloomberg survey of 18 analysts. The Economy Ministry had projected that output shrank 4.4 percent in the period, calling it “the lowest point ” for Russia. The rout on commodities markets has overshadowed the first signs of stabilization in Russia by hammering the ruble and shaking a country that relies on oil and gas for about half of its budget revenue. The nation is enduring its first recession in six years […]
Russian Recession Finds No Bottom as Economic Skid Picks Up Pace
How low can it go? Russia, which Moody’s Analytics estimates entered a recession in the first quarter, may be in for a rough ride. Gross domestic product shrank 4.6 percent from a year earlier in the second quarter, the most since 2009, after a 2.2 percent slump in the previous three months, the Federal Statistics Service said on Monday, citing preliminary data. Capital Economics Ltd. sees a downturn that will trough with a 6.3 percent plunge in the third quarter, while HSBC Holdings Plc predicts this year’s worst performance from October to December. A steeper drop would run counter to assertions by government officials that last quarter marked “the lowest point ” for Russia, with growth set to resume late this year or at the start of 2016. What’s setting the economy back is a renewed slide in commodity prices that saw crude drop to a six-month low last […]
Gazprom Profit Jumps on Weaker Ruble Even as Gas Sales Drop
Gazprom PJSC, the world’s biggest natural gas producer, said first-quarter profit rose 71 percent, beating analyst estimates, as a weaker ruble countered lower fuel prices and falling volumes. Net income climbed to 382 billion rubles ($5.9 billion) from 223 billion rubles a year earlier, the Moscow-based company said Monday in a statement. That exceeded the average 353 billion-ruble estimate from eight analysts, according to data compiled by Bloomberg. Revenue rose 5.7 percent to 1.65 trillion rubles. Profit at Gazprom, Russia’s biggest company by market value, rose even as oil’s slump weighed on export prices for its gas, which are linked to crude under most contracts. The company’s average June export price was the lowest since 2007, according to Bloomberg calculations based on Russian customs data. Gazprom may cut its production to a record this year as demand slows in Russia and Ukraine, the government said in July. While gas […]
Ruble’s Seventh Week of Losses Has Taken Drop Too Far for ING
The ruble fell, extending its seventh straight weekly decline, as ING Groep NV and VTB Capital said the Russian currency’s retreat with oil has gone too far. A 14 percent depreciation since the end of June, the most among 31 major currencies tracked by Bloomberg, has pushed the ruble’s relative strength index below 30 for the past week, the threshold signaling to some technical analysts that an asset is oversold. With the price of Brent crude trading near $50 a barrel, the exchange rate should be closer to 61 against the dollar, VTB Capital analysts Maxim Korovin and Tatiana Zueva said in an e-mailed note. Dmitry Polevoy, the chief economist for Russia at ING Groep NV in Moscow, echoed the view, saying the ruble’s fair value is closer to 61-62, as much as 5 percent stronger than it is currently trading. While the world’s largest energy exporter’s state budget […]