Russia

Fitch Ratings cut its debt rating for Russia to the second lowest rating to BBB which will severely impact the Russian economy according to Bloomberg.

The Russian debt rating cut is the first by Fitch in over a decade and is another blow to the Russian economy as the ruble continues to decline in value as result of falling oil prices and capital flight.

Estimates suggest the Russian government has spent as much as $210 billion to prop up its currency and maintain necessary foreign currency reserves.

The Russian central bank has announced it will devalue the ruble by 10 percent as the Russian economy continues to melt down in the wake of the global economic slowdown and the decline in commodity prices according to MarketWatch.

The move by the Russian central bank counters its previous gradual devaluation policy as it tries to prop the Russian economy by deterring the outflow of foreign exchange reserves by speculators.

The exchange rate of the ruble is set against a basket of currencies. The 10 percent depreciation sets a new upper limit to 41 rubles against a basket mix of 55 percent US dollars and 45 percent euro.

The Russian economy continues to a take another blow as the Ruble declined to its weakest level in over six years according to Bloomberg.

The Russian economic news comes as the Russian government and central back devalued the Russian currency as it struggles to prop up the Russian economy.

It is estimated that the Russian economy has lost 27 percent of its foreign exchange reserves since August and as much as $200 billion in Russian investment as foreign investors pull their money out of the struggling Russian economy. [Read more →]

Alcoa, the global aluminium producer based in the US, has announced it will cut 18 percent of its workforce as the Russian economy continues to struggle according to Reuters.

The unemployment news comes as the Russian economy continues to decline in the wake of the global economic slowdown and as oil prices continue to slide.

While the cuts are deep, Alcoa Russia President Andrei Donets indicated the reduction in force affecting the Russian economy will execute gradually over the course of 2009. [Read more →]

The Russian government is considering joining the Organization of Petroleum Exporting Countries (OPEC) according to Bloomberg.

The key driver of the Russian trade move is to join forces with other large producers of oil to reduce oil production in order to prop the price of oil as it continues to slide.

Ideally, the oil producers would like to a see oil price of about $60 to $80 a barrel and a cooperative cut of 2.5 million barrels a day global is needed to hit that target. [Read more →]

The Russian economy saw a record drop to 39.8 in the VTB’s Purchasing Managers’ Index (PMI) according to Bloomberg.

The glooming Russian economic news comes as the global economic crisis and the sharp drop in to the price of oil continue to negatively impact the Russian economy.

With the deterioration of the Russian economy, foreign investors have withdrawn as much as $190 billion from Russia since mid 2008. [Read more →]

Standard & Poor’s Ratings Services (S&P) lowered Russia’s investment credit rating from BBB+/A-2 to BBB/A-3 according to Bloomberg.

This is the first Russian investment downgrade since January 1999.

Further downgrades are expected as the Russian economy continues to melt down. [Read more →]

The Russian government has attempted to prop the ruble and protect the Russian economy by spending $4 billion according to Reuters.

The Russian economic news comes as the ruble and oil prices continue to slide to lower levels in the wake of the global economic crisis and the bursting of the commodity bubble.

With Russian government dept increasing dramatically over the last few days it is highly likely that the Russian government will default and mirror the default that afflicted the Russian economy in 1998. [Read more →]

The Russian central bank raised interest rates to 12 percent in an effort to prop the ruble and protect the Russian economy according to the Telegraph.

The news comes as the Russian government continues to spend reserve money on a rabidly devaluing ruble.

Key drivers of the currency collapse are a faltering Russian economy due to declining oil prices and an over valued stock market.

Estimates put the ruble at a 30 percent decline in the next few days. [Read more →]

General Motors (GM) has just opened a new flexible assembly plant as part of a recent Russia investment according CanadianDriver Communications Inc.

The Russian investment will generate an additional 70,000 units of capacity and continues to position GM as the top non-domestic automobile manufacturer in Russia.

The Russian investment news comes as the ruble and GM’s stock continue to crumble. [Read more →]

The Russian government has blocked Google’s acquisition of ZAO Begun according to AP.

The Russian investment would have delivered the assets of ad service ZAO Begun to Google from Rambler Media Ltd at an estimated $140 million.

The Federal Anti-Monopoly Service did not specifically state a reason for the rejection but it is suspected that tensions between the US and Russian government may have come into play. [Read more →]

Dmitry Medvedev and the Russian government have injected over $19 billion into the financial markets in order to prompt the Russian economy according to the Telegraph.

The news comes as the Russian stock market was suspended for a third day in a row as the global financial crisis and lower oil continues to test the Russian economy.

While many see this week’s event as a repeat of the collapse of the Russian economy in 1998, it is likely that history will not repeat itself as Russia currently holds the worlds third largest currency reserve. [Read more →]

The Russian economy continues to feel pain as the Micex Index plunged a record 17 percent according to Bloomberg.

The significant drop caused a halt in trading by the RTS Exchange for almost an hour as panic over liquidity and concerns over AIG on Wall Street.

While the Russian economy has capitalize recently on higher oil and emerging growth the recent moves on the Micex are creating deep concerns over the stability of the Russian economy. [Read more →]

Russia government’s Prime Minister Vladimir Putin has announced a calling for Russia to regain its influence over Cuba to that stood during the cold war according to AP.

The statement by Putin and the Russian government is likely in retaliation to the US announcement to development missile-defense in the Czech Republic and Poland.

While likely just heavy Russian government rhetoric, the intent is still chilling should the US move more protectionists as its economy continues to drag. [Read more →]

Russian trade of gas exports were up 17.7 percent year over year according to Reuters UK.

The Russia trade news is predominately based on Gazprom’s gas exports of 109.6 billion cubic meters in the first half of 2008.

Gazprom is a Russian gas monopoly and is the world’s largest gas company.

Vimpelcom, Russia’s second largest cell phone operator has announced a Russian investment in both Vietnam and Cambodia according to Reuters UK.

The Vimpelcom Russian investment involves a 40 percent stake worth $267 million with Vietnam state run Global Telecommunications Corporation (GTEL) and a $28 million purchase of Cambodia’s Sotelco.

For more on each Vimpelcom Russian investment see: Vimpelcom to Invest in Cambodia and Vimpelcom to Invest in Vietnam [Read more →]

The Russia economy slowed from 8.4 percent growth to 7.7 percent in May according to Reuters.

The concern and debate by the Russian government is that the Russian economy is possibly overheated will head into an abrupt slowdown

Nonetheless, the slower grow number is in line with the Russian government’s Economy Ministry which expects Russia GDP to grow 7.6 percent in 2008. [Read more →]

Dmitry Medvedev, the new Russian president, has blamed the US for the current global economic slowdown according to the Telegraph.

In a recent speech Dmitry Medvedev went on to say that the US’s “economic egoism” and protectionism were key drivers of the global economic slowdown and that the World Bank and the International Monetary Fund have failed to end the world’s economic problems.

The new Russian president even went on to suggest that the Russian government should be in charge of redirecting global economic policy.

The IMF estimates the Russian economy could experience inflation as much as 14 percent according to Forbes.

Key drivers of the inflation rise estimation by head of the International Monetary Fund include the usual suspects such as rising food and gasoline cost.

Prime Minister Vladimir Putin and the Russian government have vowed to return Russian inflation to [Read more →]

PPG Industries, US based global supplier of paints, coatings, chemicals, optical products, specialty materials, glass and fiber glass has announced it will invest in Russia according Earthtimes.

While the amount of the Russian investment was not disclosed, [Read more →]

Russia’s Severstal has made a bid for Esmark Inc, a rival US steel company, according to Reuters.

The Russian investment bid is backed by the United Steelworkers union (USW) and is [Read more →]

Peugeot-Citroen, the French automaker, and Japan’s Mitsubishi Motors have announced plan to invest in Russia through a joint company according to AFP.

The $550 million Russian investment by the two firms will take the Kaluga assembly line and produce and estimated 160,000 vehicles per year which equates to almost 6 percent of the Russian car market.

Peugeot will control 70 percent and Mitsubishi will control [Read more →]

UK’s global car dealership, Inchcape, announced it will invest in Russia according to the Telegraph.

The move by Inchcape to invest in Russia involves a $450 million purchase of a 75 percent stake in [Read more →]

Aeroflot, Russia’s national airline has renewed its interest in acquiring Alitalia, Italy’s flag carrier Alitalia, according to AHN.

The possible Russian investment comes as Air France-KLM reported their interest in Alitalia has concluded and as Russian President Vladimir Putin announced that he wanted to meet with Silvio Berlusconi, Italian prime minister-elect to discuss the deal.

The move by Putin and Aeroflot comes [Read more →]

Equifax Inc., leading US based provider of credit information, has announced it will invest in Russia according to the Atlanta Business Journal.

The Russian investment involves a 28 percent equity stake in Global Payments Credit Services LLC (GPCS) plus an option to buy up to 50 percent of the company.

The move by Equifax to invest in Russia comes as it continues on its global expansion strategy which [Read more →]

Wal-Mart Stores Inc, the world’s largest retailer, is one step closer to an investment in Russia with the appointment of Stephan Fanderl as president of Wal-Mart’s Emerging Markets-East according to AP.

With a key European executive Fanderl in place, Wal-Mart is now poised to enter the $140 billion Russian food sales market as it looks to invest in Russia through a [Read more →]

The Russian government has announced plans to cut taxes for oil companies according to Bloomberg.

The move by the Russian government is designed to help Russian oil companies overcome the stagnation they are experiencing after a decade of growth.

Oil production in Russia has declined 1.3 percent in March and comes [Read more →]

The Russian government has announced that it will restrict foreign investment in Russia according to MWC News.

The new limits on foreign investment in Russia are focused on key sectors such as energy, aerospace, mining and media, etc.

The move by the Russian government now requires foreign investors to received [Read more →]

Deere & Company, a.k.a. John Deere, the world’s leading provider of advanced products and services for agriculture and forestry, has announce that it will significantly invest in Russia according to Fox Business.

The Deere investment in Russia is estimated at $80 million in order to build a central operations center outside of Moscow.

A spokes person for Deere indicated that not only is the Russian investment good for the Russian economy but also for the other Commonwealth of Independent States (CIS) markets which include [Read more →]

The Russian government has announced that it will raise export duties on Timber exports according to Reuters.

The move by the Russian government has hit a nerve with the European Union and could potentially risk Russia’s entry into the World Trade Organization (WTO).

The plan, driven by Vladimir Putin, sets Russia trade duties on timber to 25 percent up from 20 percent and begins on April 1. Furthermore, the government of Russia plans to [Read more →]