Translated material
The price of a “special operation” in Ukraine. Online August 10
The Bell continues to conduct online, dedicated to the economic consequences of the "special military operation" in Ukraine, which began on February 24
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19:55 According to Rosstat, deflation in Russia in July accelerated to 0.39% from 0.35% in June. In annual terms, in the week to August 8, it continued to slow down - to 15.1%. Deflation is again "fruit and vegetable", it follows from the data - this product has fallen in price by 11.5% over the month. There have been two consecutive months of deflation in Russia, but it has never started in June so far.
18:47 Evraz has begun collecting applications from potential buyers of its enterprises in the US and Canada (Evraz North America division). The company is one of the few Russian companies that successfully developed business in the USA and even included it in production chains. Thus, the former Oregon Steel plant in Portland, bought in 2007 for $2.35 billion, not only worked on slabs from Nizhny Tagil, but also produced armored steel on orders from the US Army.
The division's revenue ($2.3 billion in 2021) exceeds 15% of the company's total revenue, and in physical terms, it produced 1.88 million tons of steel products. "The sale of these assets will unlock the value of the North American division as an independent company," the statement said.
Immediately after the start of the "special operation", the company hoped to save the division. The largest shareholders of Evraz are Roman Abramovich (28.68%), Alexander Abramov (19.35%) and Alexander Frolov (9.66%). Evraz itself (registered in the UK) is under its sanctions, its listing on the LSE has been stopped, and a deal with North American assets will require the approval of the UK OFSI regulator. Under the sanctions of the UK and Abramovich himself, who was forced to leave the board of directors because of them.
The day before, the NYT wrote that an investigation into Abramovich's investments through Concord Management for $8 billion had begun in the United States. They were blocked immediately after British sanctions.
17:16 Transneft has resumed pumping oil through the southern branch of Druzhba. The fact that it was terminated from August 4 due to the inability to pay for transit, Transneft confirmed the day before, and today it became known that recipients from Hungary and Slovakia paid for the transit.
16:34 Moscow exchange confirmed that from August 15 it will allow non-resident clients from countries that are not unfriendly to the bond market (but not stocks). Access will also be given to non-residents whose ultimate beneficiaries are Russian legal entities or individuals.
15:32 Inflation in the US in July in annual terms slowed down to 8.5% from 9.1% in June and was below the forecast (8.7%). Prices did not change in total compared to June: the rise in housing and food prices compensated for the fall in fuel prices. Core inflation (excluding volatile commodity groups) amounted to 0.3% compared to June and 5.9% in annual terms (forecast 0.5% and 6.1%, respectively).
Inflation data should dampen the Fed's resolve to aggressively raise rates.
15:12 In July 2022, against the background of the gas war and the continuing decline of the Russian economy, both oil and gas and non-oil and gas revenues of the federal budget decreased in annual terms, follows from the statistics of the Ministry of Finance.
- Oil and gas revenues decreased by 22.5% to 770.6 billion rubles (against 994 billion a year earlier).
- Non-oil and gas revenues (VAT, personal income tax, income tax and others) collapsed by almost 30% - to 990.4 billion rubles (against 1.39 trillion a year earlier).
- With a decline in revenues, budget expenditures in July increased by 14.5% year-on-year to 2.65 trillion rubles.
- The federal budget deficit in July amounted to 892 billion rubles, while in January-July there is still a surplus of 482 billion rubles.
13:57 In June, 44% of payments for the import of Russian coal by India were not for the dollar, Reuters calculated according to customs statistics. Of the settlements in alternative currencies, 31% were in the yuan, 28% in the Hong Kong dollar, less than a quarter in the euro and about a sixth in the UAE dirham.
In July, Russia increased deliveries to India by 20% compared to June, becoming the third exporter of coal to the country (2.06 million tons). A typical market transaction is the supply of 10,000 tons of thermal coal to the cement company Lakshmi Cement for 14.62 million dirhams ($4 million) with the participation of trader Swiss Singapore.
13:15 Taiwanese authorities will not approve the purchase of Foxconn, Apple's key contractor, Chinese chipmaker Tsinghua Unigroup for $800 million, writes the Financial Times. The price of the transaction is below the threshold subject to mandatory approval by the authorities of the island, but in the context of the aggravation of relations, it cannot take place, the newspaper writes. Moreover, 75% of Foxconn's capacities are already located in mainland China, and the company is not without reason considered one of Beijing's levers of influence.
12:37 Hungarian MOL and Slovak Slovnaft reported that they themselves paid for the transit of Russian oil through Ukraine via Druzhba and expect to resume supplies in the coming days.
Since August 4, Ukraine has stopped pumping Russian oil through Druzhba to Hungary, the Czech Republic and Slovakia due to the fact that Russia was unable to pay for the transit (due to sanctions, the payment failed).
12:24 The UK has developed a plan to cut off electricity at industrial facilities and even in residential buildings , if cold weather is combined with an acute shortage of gas, writes Bloomberg.
The plan is called the government's worst-case scenario. He suggests that the country could face a power shortage of about one-sixth of peak demand even after the emergency start-up of coal-fired power plants, agency sources said.
Under this scenario, with below-average temperatures and at the same time with reduced electricity supplies from Norway and France, London will be forced to take emergency measures to save gas, which will lead to planned power outages in businesses and homes. According to the agency, the first such shutdown could occur in January and last four days.
The basic scenario for the development of events does not provide for a power outage. In the main department of business, energy and industrial strategy, the agency was told that the implementation of the "worst" plan is unlikely.
9:22 The most mysterious news of yesterday is a series of powerful explosions at a Russian military airfield in Crimea. The Russian Ministry of Defense claims that the cause of the explosions is a violation of fire safety, the Ukrainian military does not officially say anything, but unofficially claims that the Ukrainian Armed Forces are behind the explosions. Until now, military operations have not reached the territory of Crimea. We have collected all versions of what happened here .
8:52 The main thing for the night and morning:
- The largest cargo air group "Volga-Dnepr" will reduce almost all pilots flying on Boeing aircraft. It is reported by RBC with reference to sources. According to them, we are talking about more than 200 employees. As of mid-February, the group had 11 Russian An-123 and Il-76 aircraft and 27 Boeing 737/747/777 aircraft in its fleet. Volga-Dnepr occupied more than 50% of the Russian air cargo transportation market at the beginning of the year. The group's business was directed to the global market, therefore, with the start of the "special operation" and the imposition of sanctions, its activities were greatly reduced.
- The Central Bank on the eve published statistics that analysts consider "incredible": the positive balance of the current account of Russia's balance of payments in January-July amounted to $166.6 billion, and foreign trade in goods and services - $192.4 billion. These are 3.3 and 2.5 times more than in 2021, respectively. At the same time, in July the estimate of the balance of payments turned out to be stronger than the June figures. Analysts are already suspicious of the data, writes Kommersant. The huge surplus must have been caused either by an increase in oil shipments, for which prices were stable or falling, or by a new decline in imports in July after the June stabilization, which was not explicitly reported, or invisible corrections in the figures of previous months.
- Western companies that have decided to leave the Russian market will have to reimburse office space owners up to 30 billion rubles in the next year and a half for early termination of lease agreements, Kommersant . reports citing analysts Finding new tenants for business centers can be difficult, but thanks to compensation, they could be in the black, experts say.
- Elon Musk has sold about 7.9 million Tesla shares worth $6.88 billion over the past few days, according to The Wall Street Journal, citing data from the Securities and Exchange Commission. At the end of April, after selling 9.6 million Tesla shares for $8.5 billion, the billionaire said that he did not plan to sell additional shares of the company, the newspaper reminds. Responding to subscribers on Twitter, Musk explained that the money may be needed if he still has to buy out the social network, which he abandoned in July. If the purchase of Twitter does not go through, Musk intends to buy back Tesla shares.