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Press review: Russia takes center stage in US media and curbing the ruble in Davos

January 20, 13:00 UTC+3 MOSCOW

Top stories in the Russian press on Friday, January 20

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Uncut sheets of 100 ruble banknotes

Uncut sheets of 100 ruble banknotes

© Vladimir Smirnov/TASS

 

Nezavisimaya Gazeta: Shuvalov uses Davos’ ‘Russia Day’ to rein in ruble speculation

The World Economic Forum's ‘Russia Day’ in Davos gave Russian newsmakers a platform to make headline media statements. First Deputy Prime Igor Shuvalov was the top newsmaker as he said that Russia’s Central Bank could start buying currencies, and that the government is working on a plan to reduce the ruble’s long-term volatility, which sparked a plunge in the Russian currency on the market. Nezavisimaya Gazeta writes that there is an impression that government authorities decided to lead currency speculators to the exits. FinExpertiza’s Director General Nina Kozlova told the newspaper that "the ruble is showing high yields for foreign investors." "A stable ruble and a high key rate enable them to invest foreign currency in rubles at good interest and to speculate on it gaining substantial currency profits," she noted.

However, some Russian economists tend to be more negative about the prospects for the country’s financial market, the newspaper writes. According to leading economist Yakov Mirkin from the Stolypin Club, "the stabilization of the Russian currency at a very high interest in ruble terms spurs a high inflow of speculative money by non-residents from abroad in carry trade operations," he said. But speculative operations with ruble assets cannot last forever, the expert says. "Once the first signs of any risks, or volatility emerge, we have a sudden stop or, on the contrary, capital flight, just like in 2014," Mirkin said. Any weakening of the ruble could be among such risks, because as soon as the exchange rate of the Russian currency drops speculative short-term investments in Russian assets will become senseless, the newspaper says.

According to experts interviewed by Nezavisimaya, Shuvalov’s statements were aimed at setting boundaries to curb any unwanted strengthening in the ruble.

 

RBC: Russia and Turkey team up for first joint military operation to defeat IS

Russia and Turkey have pooled their efforts together in combatting the Islamic State (terrorist group, outlawed in Russia) for the first time as they draw their positions closer, by undertaking a massive advance on Islamists in Syria and Iraq, RBC daily writes. According to the chief of the Main Operations Directorate of Russia’s General Staff, Lieutenant-General Sergey Rudskoy, Russia’s and Turkey’s military aviation have been conducting a campaign aimed at "inflicting defeat on the Islamic State in the outskirts of the Al-Bab settlement in the Aleppo province" since January 18. The operation has been endorsed by Damascus, Rudskoy said, with 36 land-based objects agreed on "by the general staffs and commands of aviation groups". Lieutenant-General Rudskoy added that "judging from the first effect of the strikes on IS terrorists, the joint efforts of Russia and Turkey are very efficient."

"In fact, this is Russia’s first joint military operation with a NATO state aimed at tackling international terrorism," Director of the Russia - East - West Strategic Research and Analysis Center, Vladimir Sotnikov, told the newspaper. However, he added, Turkish President Erdogan has always stressed Ankara’s independent position within the alliance. "Most likely Ankara’s actions in Syria have not received a stamp of approval by its western partners and only meet its own interests," Sotnikov said.

According to Professor Leonid Isayev of Russia's Higher School of Economics, the Al-Bab operation is the result of December’s trilateral talks between Russia, Turkey and Iran. "Obviously the sides reached an agreement on cooling the strife in northwestern Syria and raising mutual predictability. That is why one should not expect the Syrian army (allied with Russia) and the opposition in Aleppo and Idlib (allied with Turkey) to fight against each other on a grand scale," he told RBC. The professor sees the country being divided up according to shares of influence as the most likely alternative for a clinching a peaceful settlement to the Syrian conflict, which means that the engaged parties will benefit from eliminating IS as soon as possible and divide the territory controlled by Jihadists at the moment.

"This means that Turkey’s forces will go all out at capturing Al-Bab," Isayev added.

 

Izvestia: Russia remains star of US media’s show

The US media’s focus on Russia has skyrocketed over the past year, particularly due to the headline-making election campaign of US President-elect Donald Trump, who will be inaugurated later on Friday. Izvestia wrote in its editorial that Trump’s opponents eagerly supported his vibrant comments about his attitude to Russia and President Vladimir Putin, which put Moscow’s policy and its global role in the spotlight during the presidential election race. Once Trump won, the ‘Russia factor’ nevertheless remained, the newspaper says.

Some experts say that many ordinary American citizens who are not directly influenced by international policy issues, were not affected by the local press, though they took interest in the ‘Russian hackers’ story. Izvestia says, still the escalation of the ‘Russian threat’ in the information field continues.

Nonetheless, efforts by the US press have had a boomerang effect to some extent, particularly among the country’s political establishment, as a notable part of Trump’s supporters concluded that if Moscow helped the president-elect to win, then it should be thanked.

 

Izvestia: Italian bank eyeing Russia’s industrial assets

The parent company of Banca Intesa, which provided funds for the privatization deal of Rosneft’s 19.5% stake and acted as a financial advisor, is ready to further participate in Russia’s privatization program for its state assets, and wants to highlight that it is just as big a player in the investment banking field as JP Morgan and its ilk, Chairman of the Board Antonio Fallico said in an interview with Russia’s Izvesia daily. "For us it was a very big industrial and financial deal, and I hope this is only the first step in anticipation of many other big transactions in Russia," he said, adding that Intesa Sanpaolo has already "demonstrated its interest to other privatization deals in Russia to the Economic Development Ministry." "We’ve received no reply yet, and we’ll be able to go into more details once we have a particular request," the chairman added.

Speaking about the possible privatization of Russia’s number one lender, Sberbank, Fallico said "it is rather difficult to imagine a systemic bank such as Sberbank being sold to a foreign investor." "This is a key component of the Russian economy, and I cannot imagine any foreign investor willing to buy Sberbank. But I’m speaking as a banker. As a foreign bank we have to expand into niches where we won’t disturb the economic balance of the country that accepts us," he said. According to the chairman, Intesa is ready to "participate in the privatization of industrial enterprises and to finance the participation of America, Japan and other countries in those deals, or to acquire a share in companies of this scale." He added that this does not concern only Russia. "In Italy, it is just the same. The government can interfere in the situation if it dislikes the presence of foreigners in some strategic areas," he said.

Fallico is convinced that Sberbank cannot sell the controlling stake to a foreign investor. "It will be illogical to sell a controlling stake in Sberbank or Rosneft to a foreigner. For example, in Italy we have Eni. For our country, this is a very big company. Who is the shareholder? Italy’ Finance Ministry, no wonder. It would seem very strange, if Eni got into the hands of foreigners, taking into account the energy security perspective," he said. "Sberbank is a very systemic bank, which controls half of personal deposits and 32-35% of private business. I cannot imagine Russia reneging on its banking sector, deposits and business," the banker stressed.

 

RBC: Azimut says good-bye to its biggest hotel

Azimut Hotel Sochi, which is now managed by Russia’s top hotel chain Azimut Hotels owned by Alexander Klyachin, will pass to Biblio Globus travel company and become an all-inclusive hotel, RBC business daily says. Yug-Businesspartner, the company which has been the owner of Azimut Hotel Sochi since the end of 2016, is ditching its contract with Azimut Hotels on the hotel’s management, and starting February 1, nearly 3,000 rooms will come under ownership of its new manager, the newspaper writes with reference to two market insiders.

Azimut’s press service confirmed the information, saying that the contract was terminated due to change of ownership. Kommersant wrote earlier that Yug-Businesspartner, which acquired the hotel, is controlled by structures tied to the family of ex-Governor of the Krasnodar Region and the current Minister of Agriculture Alexander Tkachev. According to Azimut’s Marketing Director Yelena Palchunova speaking with RBC, she noted that the all-inclusive format contradicts the principles and standards of Azimut Hotels. This hotel accounted for 10-15% of the company’s revenues and almost 3% of profits, she said.

Another RBC insider familiar with Azimut’s business said it would be challenging to make the Sochi-based hotel an all-inclusive one since it has only two restaurants. However, Stanislav Ivashkevich, Deputy Director of Development of the Hospitality Industry, says he believes it is possible to reach this goal. Some hotels in Sochi have already launched this format, he points out, adding that in that case, accommodation prices at Azimut Hotel Sochi would surge roughly 30% to 4,000 rubles per day.

Yelena Palchunova told RBC that Azimut expects to offset the loss by the end of 2018. Managing Partner of Colliers International, Nikolai Kazansky told the newspaper that it is quite realistic, given that the company has enormous experience in hotel reconstruction and the expansion of the chain under its management. "As for Biblio Globus, it’s difficult to make forecasts here as the company is more well-known as a travel operator and has never been involved in hotel management before," Kazansky stressed.

 

TASS is not responsible for the material quoted in the press reviews

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