Browsing documents with the theme of Sanctions
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Macro Monthly – What Difference Do April Sanctions Make?
Sanctions game-changer. The 6 April US sanctions were something of a game-changer as they targeted some oligarchs and their businesses. Investors and businesses are likely to adopt a more cautious approach to Russia for some time until the risk level is better understood.
Russia Macro Monthly: Can continuity lead to change?
In lieu of a concrete election program, the President made a late annual state-of-the-nation speech that laid out a liberal economic vision and tough foreign policy. The latter appears to be more electoral posturing than a major change in nuclear doctrine. We set out the main economic points and those with implication for business opportunities, in this monthly.
Will 2018 prove to be a turning point?
2017 growth at 1.5%. Rosstat estimates last year’s GDP growth at 1.5%. A weakening industrial production trend was offset by stronger growth in agriculture and a recovery in retail sales. VEB estimates Q4 growth at 0.6%, down from +1.8% in Q3 and 2.5% in Q2.
Russia’s Capital Markets in 2018: Riders on the Storm
Well positioned. Russian assets are well positioned to outperform global peers in 2018. For equities whether that means strong price appreciation or another year of flat performance will be determined by the trend in global markets. Russian equity indices will hardly rise against a decline in global markets but should outperform a global rising trend.
Macro-Advisory 2018 Political Outlook
Outlook for 2018. There is no reasonable basis to assume there will be any major changes in Russian politics in 2018. We think there is at best a 25% chance that Putin will use his new mandate to implement the major reforms that Russia needs to move to a better economic growth path. More likely he will choose stability because it is lower risk. Speculation will then move to what happens in 2024. Who will Putin choose to succeed him, will that choice be challenged, and what role will Putin have thereafter?
The Kremlin and INF Reports: How will they change the economic and political calculus?
Relatively calm 2017. Although 2017 saw a deterioration in US-Russia political relations, it was a relatively good year for foreign businesses in Russia. The Kremlin stuck by its mantra of separating bad politics from good business.
2018 will be a lot more dangerous. The indications are that the relationship between the two countries is about to become even worse. The catalyst for this deterioration is expected to be the publication of the so-called Section 241 and 242 reports, which are required to be submitted to Congress by 29 January as per the terms of the 2 August ‘Countering America’s Adversaries Through Sanctions Act’ (CAATSA). The Section 241 report will be a list of individuals and entities identified as being at risk of being sanctioned in the future while Section 242 will examine the consequences of adding Russian sovereign debt to sanctioned credits.
Russia Macro-Politics December Monthly: Tempered holiday mood
Investors and government are waiting for sanctions. The CAATS act requires that the US government must draw up a list of “Putin’s inner circle” to be sanctioned and to report on the viability of bans on purchases of Russian debt by the end of January 2018. Capital markets are largely flat with low volumes as investors wait to see what happens next in Q1 or 1H18. Russian indices are set to underperform global peers by approximately 30% this year.
Russian Agriculture Growth: Can Russia feed the world?
The Russian agricultural sector is growing quickly helped by protection from imports and significant investment. It is likely to continue to grow as infrastructure bottlenecks are addressed. This offers significant opportunities for investors as this is one of the few natural resource sectors where foreign investment is encouraged. The government is keen to encourage both exports and processing domestically.
Macro-Advisory Macro Monthly: November 2017-The calm before the … what?
Economic advance continues. The economic recovery continues to strengthen and expand, albeit modestly. September GDP rose 2.4% YoY, bringing the growth for 9M17 to 1.8% YoY. The agriculture sector is a big driver, recording 8.5% growth in September (+4.7% YoY in 9M). There is also a stronger-than-expected recovery in retail sales.
Modest upgrades. Several agencies, such as the World Bank, IMF and Fitch, have modestly upgraded their forecasts for 2017-19. The Economy Ministry is the most bullish but still quite modest, with expected growth rising to 2.3% YoY in 2020.
Russia Macro: Is Moscow facing a winter of “content”?
The underlying economy is doing well, despite the problems in the banking sector
Russia Macro Monthly: How long will the positive momentum last?
Recovery strengthens. Rosstat reported 1H GDP growth of 1.5% and Q2 at 2.7%. The question is whether 2Q was a one-off or a new trend. Confidence numbers suggest recovery has peaked. Official business confidence numbers fell from -1 to -2 in July. The PMI manufacturing index fell, indicating there is still growth, but at a slower rate.
Russia Sanctions Guide: What difference have sanctions made and, is that about to change?
In some ways, sanctions had a beneficial effect, by forcing the Russian government and economy to do more with less. The new move by Congress to codify the sanctions does not change the situation, but brings uncertainty that new sanctions may be imposed, or current ones interpreted more narrowly.