Business in Brief

Kremlin Sets Example

The presidential administration will cut staff by at least 100 of the roughly 1,500 people it employs, Dmitry Medvedev's spokeswoman Natalya Timakova said Tuesday, Interfax reported.

The cuts will affect both active employees and vacancies, and the figure could end up higher if there are reductions in the offices of the president's federal envoys, she said. Details will be announced by March 1, according to two decrees signed Tuesday by Kremlin chief of staff Sergei Naryshkin.

Timakova also said the Finance Ministry would present the revised 2009 budget to the government next week. (MT)

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Committee Wants Ad Law

The State Duma's Legislation Committee is asking the parliament to pass a law that would prohibit the placement of advertisements on a residential building without consent from its inhabitants.

In cities across Russia, local government agencies with varying degrees of control over residential buildings are making the advertising decisions, a practice that contradicts guidelines set by the federal Housing Code, the law's author, Pavel Krashenikov, said, Interfax reported.

The new legislation calls for decisions on building advertising to be made at a joint meeting of apartment owners. If Duma deputies approve the legislation, changes will be made to both the federal law on advertising and the Housing Code. (MT)

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Bank Ratings Downgraded

Sberbank, VTB Bank and seven other Russian financial companies had their debt ratings cut by Moody's Investors Service because they are increasing reliance on the government for capital.

Sberbank's local currency rating was cut two levels to A3 and VTB Bank's was lowered three notches to Baa1, two stages above noninvestment grade. Both companies also had their foreign-currency debt rankings downgraded.

Other institutions that had their credit ratings cut include Vneshekonombank, Rosselkhozbank, Bank of Moscow, Gazprombank and units of VTB, Moody's said. (Bloomberg)

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Yakutia's Floating Reactors

Rosatom signed an accord with Yakutia to build four floating nuclear reactors for the nation's far eastern region, Interfax reported.

The reactors, which are made to fit on special barges, can supply power and heat to the remote parts of the region, the news agency reported Tuesday. (Bloomberg)

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Turkmens' KamAZ Trucks

KamAZ, which is struggling to clear its stockpiles, will sell more than 1,000 vehicles to Turkmenistan for $100 million, a Turkmen official said Tuesday.

KamAZ, in which Germany's Daimler took a 10 percent stake in December, has been forced to idle its assembly lines three times since November as it tries to sell its stockpiles before producing more trucks.

Turkmen President Gurbanguly Berdymukhammedov signed an order last week to buy the trucks for government use, the government official said on condition of anonymity. (Reuters)

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Grain Purchases Double

The government almost doubled the amount of grain purchased last week as domestic prices fell.

The government bought 252,300 tons of grain from Feb. 16 to 20, compared with 128,400 tons a week earlier, the Agriculture Ministry said Tuesday. (Bloomberg)

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Higher Duties on Coal?

Russia may raise the import duty on coking coal to 15 percent, from 5 percent currently, to aid domestic producers after demand collapsed, Vedomosti reported, citing two unidentified government officials.

A state commission for protective measures in trade will shortly review the proposal to raise duties, the newspaper said. (Bloomberg)

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Itera to Build Turkmen Pipe

Gas producer Itera will build a pipeline in Turkmenistan to link its prospective gas fields to export routes, a government source said Tuesday.

"State company Turkmengaz will finance the project, which costs $176.7 million," the source said. (Reuters)

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GDP Down 8.8%

Russia's gross domestic product fell by 8.8 percent in January in year-on-year terms, Interfax reported Tuesday, citing a government source.

The Economic Development Ministry will release its January GDP estimate in its monthly state of the economy report. (Reuters)

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Yemen's Oil, Gas Relations

Yemeni President Ali Abdullah Saleh said Tuesday that his country wanted to "activate" its relationship with Russia in the oil and gas sectors.

Saleh spoke after meeting Prime Minister Vladimir Putin in Moscow. Both Russia and Yemen plan to make their first deliveries of liquefied natural gas this year. (Bloomberg)

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Hryvna Falls on Downgrade

Ukraine's hryvna tumbled Tuesday, closing at a record low against the dollar, after Moody's Investors Service said it might cut the country's rating because political infighting is hampering efforts to avert a financial crisis.

The currency dropped 3.4 percent to 9.26 per dollar in Kiev, below the previous lowest close of 9.10 on Dec. 18. Moody's is reviewing whether to cut Ukraine's current rating of B1, four levels below investment grade, it said in a statement.(Bloomberg)

Polymetal Has Shortlist

Polymetal has a shortlist of five acquisition targets and said it expects to complete two deals this year as it works to boost reserves and production of precious metals, CEO Vitaly Nesis said Monday.

The company knows the assets "very well," is in discussions with their owners and has already conducted technical due-diligence studies, CEO Vitaly Nesis said Monday. (Bloomberg)

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Repo Auctions Changed

The Central Bank said Tuesday that it would daily set the minimum interest rate for one-day repo auctions, the regulator's main tool for providing liquidity to commercial banks.

The decision will alter the current regime whereby the Central Bank's board sets the minimum rate for repo auctions along with other rates at its meetings.

The decision will enable the Central Bank to set the daily minimum rate at a higher level than the minimum rate set by the board, thus giving the regulator more control. (Reuters)

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Bank Wants Ukraine's Help

Rodovid has become the first Ukrainian bank to ask the government to help it recapitalize, after eight banks had been taken into receivership as the global financial crisis takes its toll.

Rodovid, the 20th-largest bank in Ukraine, said Tuesday that it wanted to raise its capital to 700 million hryvnas ($91 million) from 435 million hryvnas, but did not say how much it wanted from the state.(Reuters)

For the Record

Magnitogorsk Iron & Steel Works and Italy's Magnetto Automotive scrapped plans to create a joint venture producing auto parts in St. Petersburg because of a lack of orders, said Gerhard Kening, a vice president at Magnetto, Vedomosti said. (Bloomberg)

Aeroflot carried 636,000 passengers in January, 0.3 percent more than in the same month last year, Aeroflot said Tuesday. (Bloomberg)

Russia's economy shrank 8.8 percent in January from the same period a year earlier, Interfax reported, citing an unidentified government official. (Bloomberg)

Severstal repaid from its own funds $325 million of eurobonds issued in 2004, the company said in a statement Tuesday. (Bloomberg)

Gazprom plans to rework its strategy on offshore projects by the end of the year, as Russia's largest energy producer seeks to expand its resource base, the firm said Tuesday. (Bloomberg)

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