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Press review: ‘Black Tuesday’ rocks Russia’s stock market and Mir cards face setbacks

Top stories from the Russian press on Wednesday, September 21st

Media: Donbass to decide where it belongs in a week

The Donetsk and Lugansk People’s Republics, as well as the areas of the Kherson and Zaporozhye regions controlled by Russian troops, will hold referendums on joining Russia on September 23-27. The US and Europe have stated that they will not recognize the plebiscites, while Kiev vowed to continue "liberating" its territories." Experts point out that if these areas join Russia, Moscow will be able to view attacks on them as aggression and take a whole range of retaliatory measures, Kommersant writes.

If the new territories are accepted into Russia, any attack on them will be considered to be aggression, providing the Russian authorities with the right to give "an adequate" response, Moscow State Institute of International Relations Associate Professor Ilya Rachkov explained. Apart from other things, Russia’s military doctrine says that in case of aggression against the country, "when the very existence of the state is in danger," Russia has the right to use nuclear weapons. And it is Russia that will decide what constitutes such a threat, the expert stressed, adding that in theory, it could already be said that rockets hitting the Kursk Region posed that kind of danger.

Political scientist Vitaly Ivanov, in turn, told Vedomosti that Russia would not wait to sign treaties after the plebiscites are conducted. "The referendums are the first part of a single plan, which has fundamentally been agreed on and there is no turning back," the expert emphasized.

If the referendums take place, the United States and the European Union will highly likely implement the proposals that US senators put forward on September 20, suggesting providing more sanction powers to President Biden’s administration, partner at the NSP law firm and sanctions law expert Sergey Gladilin noted. According to him, sanctions on Russia may be expanded to include more export industries.


Kommersant: Another ‘Black Tuesday’ rocks Moscow’s stock market

Trading on the Moscow Exchange experienced another "Black Tuesday." The stock exchange index was down by almost nine percent during the main trading session, tumbling back to last month’s lows. At first, the bears were set into motion by plans to increase the debt burden on oil and gas companies and later in the day, political news ramped up sales, Kommersant writes.

At the beginning of the day, the market situation was affected by news about the government’s plans to collect some 1.4 trillion rubles ($23.1 bln) from commodity exporters in 2023. "A rise in export duties on pipeline gas and oil, as well as the introduction of duties on LNG and an increase in severance tax, will reduce free cash flow for oil and gas companies," Portfolio Manager at Alfa Capital Dmitry Skryabin noted.

The additional tax burden puts the prospects for dividend payments into question. The issue has always been one of the main drivers on the Russian stock market. "After the special military operation began, many Russian companies started to face not only financial but also technical issues complicating dividend payments. The latest news reports, which in themselves boost the bear sentiment, could have put strong psychological pressure on investors," Leading Global Research Analyst at Otkritie Investment Oleg Syrovatkin pointed out.

News about plans to hold referendums in areas where the special military operation is taking place, as well as amendments to the Russian Criminal Code related to mobilization and martial law, also negatively affected the market. It is about new risks, Chief Analyst at Ingosstrakh Investment Viktor Tunev stressed. According to him, market players weren’t sure how to react to them so they preferred to sell assets. Future trends on the stock market will first and foremost depend on how the geopolitical situation unfolds. "If no more risks emerge, we may see the market recover on expectations of an inflow of funds from dividend payments," Tunev added.


Nezavisimaya Gazeta: How Moscow’s special operation affects Russia-China ties

The Chinese media welcomed Russia’s position on Taiwan, stressing that Moscow firmly supported China’s territorial integrity. Some Russian media outlets even point out that Moscow and Beijing are moving towards creating a defense alliance. At the same time, the Western media claim that the Chinese are somewhat disappointed in how Russia’s special military operation in Ukraine is going because they expected it to deal another blow to the United States’ image after its failure in Afghanistan, Nezavisimaya Gazeta notes.

The Beijing-based newspaper Huanqiu Shibao writes that China and Russia continue to deepen their strategic cooperation. The paper quotes member of the Politburo of the Chinese Communist Party Yang Jiechi as saying that Beijing and Moscow stand together in protecting a global system based on international law and respect for the United Nations Charter.

Meanwhile, the Financial Times claims that the unfolding of the military situation in Ukraine has complicated relations between Moscow and Beijing. However, NBC, an American broadcaster, describes Russia’s situation in another way. According to the media outlet, the Kremlin is successfully creating its own international coalition. A whole lot of countries - from China, North Korea and Iran to India, Turkey and Hungary - are ready to wish good luck to Russia. The thing that unites the members of this coalition is their need for Russian oil and gas. Besides, they are also in need of Moscow’s diplomatic support. In particular, China needs support on the Taiwan issue and Turkey seeks backing in order to resolve the issue of Kurdish rebel units.

Senior Researcher at the Higher School of Economics Vasily Kashin emphasized that "all the official statements that China has made recently highlight its resolve to strengthen ties with Russia rather than reduce them." "There is simply no other option for Beijing as the United States is increasing pressure on China, particularly in terms of the Taiwan issue," the expert stressed.


Media: Foreign banks suspend use of Russia’s Mir payment system

Following Turkish banks, banking institutions in other countries, namely Vietnam and Kazakhstan, have suspended the use of Russia’s Mir payment system. Western pressure can make certain players take such measures on a temporary basis in order to avoid being cut off from the global financial system, said experts interviewed by Izvestia.

Major foreign banks are sensitive to signals related to sanctions as the use of foreign currency is important for them and the risk of being cut off from international payments is too high, Vice President of the Association of Banks of Russia Alexey Voilukov explained. According to him, the leading banks have to take these risks into account, restricting the use of foreign national payment systems or at least trying not to advertise this kind of partnership.

After the Turkish precedent, banks in the countries that continue to accept Mir cards will probably see an increase in pressure, Finam Analyst Igor Dodonov noted. However, in his words, the majority of those are members of the Commonwealth of Independent States (CIS) who depend on Russia in terms of the economy or politics and are unlikely to abruptly abandon cooperation with the Mir payment system. Still, the West’s steps will complicate the implementation of the Russian Central Bank’s plans to expand the use of Mir cards overseas.

Foreign banks’ move to restrict the use of the Mir payment system may lead to a rise in demand for trips to other countries to open card accounts, Vice President of the Russian Union of Travel Industry Dmitry Gorin told Kommersant. However, independent expert Dmitry Vishnyakov warned of risks, saying that "these accounts may be frozen or targeted by other actions particularly aimed at escaping secondary sanctions."


Izvestia: Russia may designate Greenpeace as foreign agent

State Duma member representing the United Russia party Alexander Yakubovsky has sent a request to the Russian Justice Ministry and the Prosecutor General’s Office that Greenpeace be designated as a foreign agent, Izvestia writes. The organization’s attempts to block the unloading of Russian LNG in Finland are one of the reasons behind the move. Besides, the lawmaker pointed out that the Greenpeace activists demanded that Helsinki announce an immediate end to Russian energy exports.

Green humanitarian intervention has long been rooted in the West’s soft power methods, State Secretary of the Russian Environmental Chamber Vadim Petrov emphasized. India was the first country to ban Greenpeace, he added.

The impact that environmental and climate agenda has on global political and social processes is clear, the expert noted. Oftentimes, some institutions use environmental organizations to achieve their own economic goals, redistribute markets, redirect financial flows and interfere in the sovereign affairs of other countries, Petrov added.

Founder of the Klopenko Group investment company Yegor Klopenko believes that today, Greenpeace has been weaponized by part of the Western elite. On the other hand, designating the organization as a foreign agent will have little impact, he added. First, foreign agents have the right to work in Russia and second, Greenpeace has broad global interests so the organization’s new status in Russia won’t hurt the NGO much, the expert explained.

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