Vedomosti: Russia expects to hold arms control talks with US

Moscow and Washington intend to restart work on strategic stability issues, Russian Foreign Minister Sergey Lavrov stated on April 14, Vedomosti writes. According to Lavrov, US Secretary of State Mike Pompeo touched upon the possibility of resuming arms control talks in a recent phone call. The Russian top diplomat pointed out that Moscow welcomed Washington’s interest in this topic but would like to hold "more specific discussions, particularly in relation to the Strategic Arms Reduction Treaty (New START)."

According to a source close to the Russian Defense Ministry, there is little hope that the United States will reconsider its position on New START. Washington will definitely continue to insist on bringing China into the treaty, which Beijing sees as unacceptable.

Washington pointed to China to justify its withdrawal from the Intermediate-Range Nuclear Forces Treaty, and the US administration has, on the whole, come to the conclusion that there is no sense in bilateral talks of this kind, Editor-in-Chief of the Russia in Global Affairs magazine Fyodor Lukyanov pointed out. "The position is clear, one can reject it and believe it is wrong but it has its own logic. And this logic says that New START cannot be extended," Lukyanov concluded. Engaging more countries will mean that the treaty will have to be nullified and a new document will need to be drawn up, the expert explained. "Why should the Americans abandon this idea when their standoff with China is heating up?" he noted.

US officials don’t seem inclined to do so at the moment. The Russia-related propaganda is still intense though it has somewhat taken backstage right now, the expert noted. If the coronavirus pandemic comes to an end within the next two months, the Trump administration will have no time to think about extending the accord as it will be focusing on the presidential race, Lukyanov emphasized.

 

Rossiyskaya Gazeta: Oil cut deal fails to push prices up

Oil prices did not change much following the most recent production cut deal, hovering at the level of $30-33 per barrel. However, if oil producers had failed to strike an agreement, oil prices would have plunged to $20 per barrel and even lower, said experts interviewed by Rossiyskaya Gazeta.

"Expectations of a new deal were already included in the prices," Alfa Capital Analyst Maxim Biryukov explained.

The deal will start to have an actual impact on the market in early May, when the parties will start implementing the agreement. However, there is no need to overestimate the future impact. "Roughly speaking, as cities across the globe remain on lockdown and planes don’t fly, it is hard to explain why an oil production cut of a little over ten percent should significantly influence the price," Biryukov pointed out.

The supply-demand imbalance on the oil market currently stands at nearly 20 mln barrels a day and is expected to keep growing. Oil depots are filled beyond the 70-percent capacity level and oil production in the Middle East doesn’t seem to be declining. This is why it is news about a slowdown in the coronavirus spread rate that will make prices go up, as well as the removal of lockdown restrictions and the gradual recovery on global markets.

"The new OPEC+ deal will not ease the situation on the market but it will make the process of reducing production more manageable and balanced," Commodity Market Analyst at Otkritie Broker Oksana Lukicheva noted. In her view, oil prices will range between $30-40 per barrel until the end of the year.

 

Izvestia: Here's what may help save industries hit by COVID-19

Direct government support for businesses, steps to boost the construction industry and a number of other precise measures need to be taken to help industries damaged by the coronavirus pandemic, experts interviewed by Izvestia said, commenting on Russian President Vladimir Putin's videoconference meeting with cabinet members.

Industries that have been hardest hit by the pandemic include trade, aviation, road freight transportation and construction. A decline in mortgage lending and corporate loans is based on global uncertainty stemming from the coronavirus spread, lockdown measures and economic instability. Common people and businesses alike are in no hurry to take out bank loans because they can hardly tell if they will be able to repay them, says Director of the FBK Grant Thornton Strategic Analysis Institute Igor Nikolayev.

Russia’s Central Bank has already taken some steps to support bank lending, particularly allowing banks to give out mortgage loans without meeting clients in person, Vice President of the "Russia" Association of Banks Alexei Voilukov pointed out. Nevertheless, the number of apartments purchased through mortgage loans will decline in the coming months because Russians don’t have an opportunity to see the properties due to the lockdown and sales offices are closed, he added.

Voilukov expects that for the time being, businesses will be provided with loans to maintain their working capital and pay wages to their employees. According to the expert, banks are interested in concessional lending so that companies pull through the crisis and are able to pay their debts in the future. However, banks need the government or the Central Bank to offset these concessions, Voilukov added.

Meanwhile, there are some industries that have received a boost amid the pandemic. These particularly include delivery services, pharmaceutical companies and food retailers, Nikolayev noted. The government needs to create favorable conditions for them, the expert stressed.

 

Nezavisimaya Gazeta: Sanders moves to endorse Biden for president

A few days after dropping out of the presidential race, Senator Bernie Sanders of Vermont urged his voters to support former US Vice President Joseph Biden. This could spell bad news for Donald Trump as the incumbent US president now would not be able to benefit from an anticipated split among his opponents, Nezavisimaya Gazeta notes.

The US President earlier openly encouraged Sanders’ supporters to vote Republican. Trump strongly defended the idea of holding the November election normally, and if the pandemic faded by then and voters had to show up at polling stations, it would have played into Trump’s hands. Sanders supporters would have had no reason to go to polling stations had their candidate not urged them to cast their ballots for someone else. That said, by throwing support behind Biden, Sanders denied Trump an important election advantage.

The Democrats have learned a lesson from the mistake they made in the 2016 presidential election. At the time, Sanders waited too long before acknowledging his defeat to Hillary Clinton, which confused his voters. Trump, in turn, kept telling them that the party leadership had stolen Sanders’ victory, so as a result, many left-wing voters cast their ballots for Trump in protest.

However, this does not necessarily mean that Biden has gained a decisive advantage over the incumbent president.

"Most of Sanders voters are under 40. They support Sanders because his views appeal to them. They are unlikely to agree that there is a need to vote for any candidate who is not Trump. Now everything will depend on Sanders and Biden’s ability to mount a strong campaign with a focus on younger people," Head of the Center for North American Studies at the Primakov Institute of World Economy and International Relations Viktoriya Zhuravleva pointed out. "I’m not sure that they will succeed in that," the expert added.

 

Vedomosti: Russian lockdown hurting advertising market

Outdoor billboard advertising companies may lose more money due to the coronavirus than other media businesses, ad agents interviewed by Vedomosti said. The reason is clear: due to the lockdown, the audience for outdoor advertising has plummeted following the plunge in automobile and pedestrian traffic.

In March, outdoor advertising companies collected 20% less revenues than they did in the same period of 2019. They may lose up to half of their budget in April, experts said. Companies that had to suspend their activities due to the spread of the coronavirus that include entertainment event organizers and tourist companies, were the first to abandon outdoor advertising campaigns.

The situation will not change much in April and May, Russ Outdoor Business Manager Elvira Khisayeva pointed out, adding that fitness centers, movie theaters and other entertainment businesses were postponing advertising campaigns.

Television companies, in turn, expect the TV advertising market to plunge, pushing their revenues down by 20-25%, top managers from four major TV channels told the newspaper. Due to the coronavirus pandemic, some advertisers moved to save promotion money.

However, the lockdown has boosted Russia’s TV audience for the first time in years, and the nation’s young viewers can be counted in here. This is why TV channels seek to convince advertisers that it is the right time to promote their brands on television despite a fall in sales, experts added. The pandemic will end and people will begin to spend money once again, and then, companies that have enhanced their brand awareness will win the day.

 

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