Russia 110201 Basic Political Developments

National Economic Trends

Russia to Start Selling Stockpiled Grain on Feb. 4 (Update1)

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

By Marina Sysoyeva and Ilya Khrennikov

Feb. 1 (Bloomberg) -- Russia will start selling grain from government inventories on Feb. 4 to meet demand and curb domestic prices, Deputy Agriculture Minister Sergei Korolev said.

The state has 9.5 million metric tons of stockpiled grain and plans to sell as much as 2.5 million tons within five months before the next harvest, Korolev told reporters in Moscow today. This will consist mostly of grain purchased from farmers during 2008.

Russia’s grain harvest fell 37 percent last year to 60.9 million tons because of the country’s worst drought in at least half a century. The government banned cereal exports in August and announced plans to sell grain from state reserves to support the domestic market.

This year’s grain harvest may reach 85 million tons, exceeding domestic consumption projected at as much as 74 million tons, according to the Agriculture Ministry. The grain- export ban may be lifted from July 1, the government has said.

To contact the reporters on this story: Marina Sysoyeva in Moscow at [e-mail]; Ilya Khrennikov in Moscow at [e-mail].

To contact the editor responsible for this story: Claudia Carpenter at [e-mail]

Last Updated: February 1, 2011 03:59 EST

Gov't to start grain sales on February 4

http://www.rbcnews.com/free/20110201111723.shtml

      RBC, 01.02.2011, Moscow 11:17:23.The Russian government plans to start interventions on the grain market by selling grain on February 4, Deputy Agriculture Minister Sergey Korolyov announced today. "The main goal of interventions is to reduce the shortage of grain in the drought-hit regions that develop cattle farms," the official explained.

      According to him, the current market situation is favorable for agricultural producers. "The price of grain is high; the regions that were not affected by the drought are even getting excess profit," he said. At the same time, he noted that 9.5m tonnes of grain held in the government's Intervention Fund was sufficient to influence market prices.

February 01, 2011 09:20

Banks have 543.0 bln rbs on CBR correspondent accounts on February 1.

http://www.interfax.com/newsinf.asp?id=219098

MOSCOW. February 1 (Interfax) - Russian banks have 543.0 billion rubles on correspondent accounts in the Central Bank as of February 1 including 351.9 billion rubles for Moscow banks

The balance on January 31 was 529.6 billion rubles and 324.2 billion rubles, respectively.

Banks had 761.4 billion rubles on deposit accounts in the Central Bank on February 1 against 734.6 billion rubles on previous day.

Russian Manufacturing Growth Unchanged in January from December

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=apI3PmkDvXVs

By Ilya Khrennikov

Feb. 1 (Bloomberg) -- Russia’s manufacturing growth was unchanged in January from December’s 33-month high, reflecting faster growth of both output and new orders offset by a weaker contribution from employment.

The Purchasing Managers’ Index stood at 53.5, which was above the long-run average for the series of 52.1, HSBC Holdings Plc said in a report today, citing data compiled by Markit Economics. The survey-based index indicates a contraction when it is below 50 and growth with a figure above 50.

To contact the reporters on this story: Ilya Khrennikov in Moscow at [e-mail].

To contact the editor responsible for this story: Amanda Jordan at [e-mail].

Last Updated: February 1, 2011 00:14 EST

Manufacturing PMI stays at a healthy 53.5 in January

http://www.bne.eu/dispatch_text14117

VTB Capital

February 1, 2011

News: January Manufacturing PMI stayed at a robust 53.5 in January for the second month in a row. The output index increased to 55.4 (from 54.8) and new orders climbed to 55.9 (from 54.3). The employment index softened slightly from 52.7 in December, but remained above the 50 mark at 52.2. The output prices index jumped to 61.6 (from 60.3) and the input price index rose to 78.0 (from 77.4).

Our View: The January Manufacturing PMI data suggest that activity continued to expand at a healthy pace during the month. The higher output and new orders are encouraging and might provide the impetus for a further improvement in the manufacturing sector's performance in February.

Inflationary pressures continue to mount, with the output and input price indices climbing closer to pre-crisis highs, which is yet another reason for the CBR to continue tightening its monetary policy.

Business, Energy or Environmental regulations or discussions

Norilsk, Rosneft, Lukoil, VimpelCom: Russia Equity Preview

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aQhP4aKOxiUw

By Scott Rose

Feb. 1 (Bloomberg) -- The following companies may be active in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.

The 30-stock Micex Index fell 0.7 percent to 1723.42. The dollar-denominated RTS Index declined 0.8 percent to 1870.31.

OAO Norilsk Nickel (GMKN RX): Norilsk Nickel said yesterday that nickel output may rise as much as 5.9 percent this year after it resumes production at a mine in Australia. Russia’s largest miner declined 2.6 percent to 7,484.03 rubles.

OAO Rosneft (ROSN RX): Rosneft is scheduled to release financial results for 2010. Arkady Dvorkovich, President Dmitry Medvedev’s top economic adviser, said yesterday that Russia’s largest oil company has been “among the leaders” for state companies in spending on research and development since management changed last year, Interfax reported. The company’s shares advanced 0.7 percent to 254.61 rubles.

OAO Lukoil (LKOH RX): Lukoil said yesterday that it planned to buy from ERG SpA an 11 percent stake in a joint venture to operate the ISAB refining complex in Italy. The Russian company may raise its stake to 60 percent from 49 percent in a transaction that will amount to 205 million euros ($281 million). Russia’s second-largest oil producer fell 1.1 percent to 1,829.93 rubles.

VimpelCom Ltd. (VIP US): VimpelCom may change the date of its March 17 shareholder meeting, Chairman Jo Lunder said yesterday in an interview. Shareholder Telenor yesterday asked that a dispute over VimpelCom’s purchase of Egyptian billionaire Naguib Sawiris’s phone assets be referred to a court of arbitration. VimpelCom Ltd. VimpelCom fell 0.9 percent to $13.84 in New York.

To contact the reporter on this story: Scott Rose in London at [e-mail].

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

Last Updated: January 31, 2011 22:01 EST