Table Dynamics of international stock market indices (as of August 2008) Dynamics Dynamics since Index Ticker Value within the the year month (%)* beginning (%) MICEX (Russia) MICEXINDEXCF 1348,92 -9,29 -28,RTS (Russia) RTSI 1646,14 -15,64 -28,Dow Jones Industrial (USA) Average DJI 11543,55 1,52 -12,(USA (USA) (USA) NASDAQ Composite (USA) NASD 2367,52 2,47 -10,S&P 500 (USA) SPX 1282,83 1,99 -12,FTSE 100 (UK) FTSE 5636,60 5,31 -12,DAX-30 (Germany) DAX 6422,30 -0,22 -20,CAC-40 (France) CAC 4482,60 2,41 -20,Swiss Market (Switzerland) SSMI 7238,74 3,19 -17,Nikkei-225 (Japan) NIKKEI 13072,87 -1,96 -14,Bovespa (Brasil) BUSP 55680,41 -2,66 -12,IPC (Mexico) IPC 26290,99 -2,93 -10,IPSA (Chile) IPSA 2895,21 -0,92 -5,Straits Times (Singapore) STI 2739,95 -6,26 -21,Seoul Composite (South Korea) KS11 1474,24 -7,74 -22,ISE National-100 (Turky) XU100 39844,48 6,09 -28,Morgan Stanley Emerging Markets Free EFM 778,39 -6,69 -22,Index * Versus indices, valid on July 27, 2008.
137,5% Dow Jones Industrial Average NASDAQ Composite 130,0% The MICEX Index The RTS Index 122,5% 115,0% 107,5% 100,0% 92,5% 85,0% 77,5% Fig. 6 Dynamics of the main USA and Russian stock market indices (in % to the date 01.06.2007) Corporate news ÎÀÎ «Gasprom» On August 22, 2008 the Board of Directors of OAO "Gazprom" has agreed on extension of the authorized capital of OOO "Gazenergeticheskaya Company" (OOO "GEC") by incorporation of 53,47 per cent of shares, owned by OAO "Gazprom” shares in OAO "Mosenergo" and 11 per cent shares of OAO "TGC - 1 ", as well as the acquisition by OAO "Gazprom " of 17.7 per cent shares of OAO" TGC-ÎÀÎ «Gaspromneft» On August 6, 2008 WTB Bank issued unconsolidated results for RAS (for the parent company) for July 2008. For the first seven months of 2008 the assets of OAO "WTB Bank" as per RAS have grown by 22 per cent, i.e. from RUR 1 507 billion to RUR 1 831 bln. ". Profit before tax for July amounted to EURO 69 million.
On August 7, 2008 the daughter bank of OAO "WTB Bank”, Bank WTB (Georgia) rpovided credit to Georgia largest electricity distributor (AO "Telasi") in the amount of USD 14 million for 4 years.
On August 11, 2008 WTB Bank and Landesbank Berlin AG were have arranged a syndicated loan for OAO "Binbank" in the amount of USD 27 million for 1 year, funds from which are planned to address to financing of the bank's clients contracts.
ÎÀÎ «LUKOIL» Oil companies of OAO «LUKOIL» in Russia have downgraded prices for some types of motor fuel in August 2008. In particular, the company's enterprises have reduced in the first half of August prices for diesel by an average of 7 per cent for oil fuel - by 8 per cent on average and for jet fuel by 4 per cent.
On August 28, 2008 OAO LUKOIL and ConocoPhillips have launched in production the South Hylchuyusk oil well, located in the Nenetsk Autonomous Region.
29 Aug., 2008 OAO «LUKOIL» has disclosed consolidated financial reporting for the first half of 2008, prepared under US GAAP. Net income, excluding the impact of hedging and write-offs of the 01.06.18.06.04.07.20.07.07.08.23.08.10.09.26.09.18.104.22.168.15.11.03.12.19.12.07.01.23.01.08.02.27.02.17.03.02.04.18.04.06.05.22.05.07.06.25.06.11.07.29.07.14.08.first half of 2008 amounted to USD 8,168 million, what is by 103.5 per cent higher than in the first half of 2007. Final net profit amounted to USD 7 293 million (increased by 91.1 per cent). EBITDA has increased by 74.5 per cent and made USD 11,082 million. Revenue from sales increased to USD 56,890 million, or by 59.0 per cent.
OAO «Mosenergo» On August 14 OAO «Mosenergo» has disclosed financial results for the first half of 2008: revenues amounted to RUR 48.1 billion, what is by 17.7 per cent higher than in the last year (RUR 40.1 billion).
Profit from sales amounted to RUR 2.3 billion (decreased by 8.97 per cent). Net profit of OAO «Mosenergo» in the first half of 2008 increased as compared with a similar indicator of the last year over 400 per cent and amounted to RUR 1.4 billion due to the revenue from the placement of additional emission.
On August 25, 2008 OAO «Mosenergo» and Siemens AG in the framework of the third phase of investment program, have signed a contract to supply equipment for the Power Plant-16.
OAO «MMC« Norilsk Nickel» On August 8, 2008 by the decision of the Board of Directors of OAO «GMK Norilsk Nickel» Vladimir Strzhalkovsky has been elected to the prosition of Director General.On August 20, Standard & Poor's agency has confirmed the credit rating of OAO «GMK Norilsk Nickel» as « BBB-» upon analyzing the financial and operating performance, as well as its shareholder structure. Forecast is «stable».
On August 22, 2008, the Board of Directors of OAO «GMC Norilsk Nickel» decided to purchase the company's own shares amounting to 7 947 000 shares (about 4 per cent of the authorized capital of OAO «GMC Norilsk Nickel»).
ÎÀÎ «ÍÊ «Rosneft» On August 29, 2008 OAO «NK« Rosneft» has published consolidated financial reporting as per U.S. GAAP for the second quarter and first half of 2008. In the second quarter of 2008 EBITDA amounted to USD 7 052 million, having grown nearly twice as compared with the USD 3,581 million in the second quarter of 2007, and for the first six months – USD 11,750 million, which is by 121 per cent more than in the first half of 2007. In the second quarter of 2008 the net profit has grown to USD 4,312 million (by 153per cent), and for the first six months of 2008 by USD 6 876 million, which is by 187 per cent more than in the first half of 2007.
OAO «Rostelecom» On August 4, 2008 OAO «Rostelecom» has disclosed unaudited financial results for the first half of 2008, developed in accordance with RAS: revenues made RUR 30 587.5 million; profit from sales increased by 16.1 per cent to RUR 6 315.0 million; Rate OIBDA (operating income before depreciation and amortization) grew by 15.6 per cent and reached RUR 8 453.8 million. And net profit increased by 6.2per cent and amounted to RUR 4 983.5 million.
«Sberbank of Russia» On August 22, 2008 «Sberbank of Russia» has disclosed financial results for 7 months of 2008 in accordance with RAS (unconsolidated indicators): Profit before taxes increased by 43.2 per cent and amounted to RUR 107.1 billion, while net profit amounted to RUR 81.8 billion (growth by 40.0 per cent).
Review of the Most Important Issues Considered at the Meetings of the Government of the Russian Federation in August M. Goldin The most important issues considered at the meetings of the Government of the Russian Federation in August 2008 were the draft of the federal law “On the federal budget for 2009 and for the planning period of 2010 and 2011” and the report of the Ministry for Economic Development and Trade on the preliminary results of socio-economic development over the first half of 2008 and the forecast of socio-economic development of the Russian Federation in 2009 and in the planning period of and 2011.
On August 21st at the meeting of the Presidium of the government of the Russian Federation the draft federal law “On the federal budget for 2009 and for the planning period of 2010 and 2011” was considered.
Budgetary and fiscal policy for 2009-2011 has for the first time been fully formed and will be fulfilled under conditions of application of “sliding three-year period” mechanisms, which will enable to guarantee its continuity and predictability for the three-year period, orientation for achievement of the strategic goals of the government policy, the most efficient and interrelated use of financial resources and measures for regulating priority problems solution.
At the same time further prolongation of the budget planning period is required to ensure long-term stability of the budget and strengthening its role in the economy development. To achieve these goals the Government of the Russian Federation started the development of the Long-term budget strategy for the period up to 2023.
Long-term budget planning will enable to formulate priority goals and tasks of the budget policy, for whose achievement it is necessary to use different financial instruments, including mobilization of the budget resources.
On the same day the preliminary results of socio-economic development over the first half of and the forecast of socio-economic development of the Russian Federation in 2009 and in the planning period of 2010 and 2011 were discussed.
The Presidium of the Government of the Russian Federation took into account the report made by Minister for Economic Development and Trade of the Russian Federation, Nabiullina E. C., concerning the issue.
The Presidium of the Government of the Russian Federation approved the following papers prepared by the Ministry for Economic Development and Trade of the Russian Federation with the participation of the federal executive bodies concerned:
- preliminary results of socio-economic development over the first half of 2008 and the expected results of socio-economic development of the Russian Federation in 2008;
- the forecast for socio-economic development of the Russian Federation in 2009 and in the planning period of 2010 and 2011.
At the meeting of the Government of the Russian Federation on August, 28th the issue of subsidies distribution among the budgets of the subjects of the Russian Federation in order to support measures for balancing of the budgets of the subjects of the Russian Federation for 2008.
When determining the subjects of the Russian Federation, to which it is intended to provide subsidies, the results of the monitoring of fulfillment results for consolidated budgets of the subjects of the Russian Federation over the first half of 2008 were taken into account.
In connection with the continuous growing of prices for fuel the Ministry of Finance of the Russian Federation together with the Ministry of Regions of the Russian Federation considered the issue of financial support provision to the subjects of the Russian Federation, where fuel oil (mazut) is used as the main energy carrier at the objects of power industry and housing complex. Taking into account the prices for fuel, as well as the data by the Federal Tariffs Service on the real growth in price and the structure of the fuel balance of the power supplying organizations in the regions, there were the calculations made of the demand for the necessary financial means for the subjects of the Russian Federation mentioned above. According to the results of calculations, the territories with high risks of maximum power loads in autumn and winter of 2008-2009, requiring additional financial aid include Kamchatski and Primorsi krai, Arjkangelsk and Murmansk oblasts, to which it is supposed to give, correspondingly, RUR 419.8 mln, RUR 474.2 mln, RUR 871.6 mln and RUR 1 474.6 mln.
The suggestions mentioned were approved at the meeting of the working (trilateral) group on improving of the interbudgetary relations in the Russian Federation on August 5th..
Review of Economic Legislation I. Tolmacheva The following changes were made to the legislation in August: the procedure for allocation of the grants to the subjects of the Russian Federation, whose executive bodies achieved the best results in their activity was determined; the list of the types of salaries and other incomes, which are subject to the deduction of the alimony for the under age children was specified; the coefficient for the duty rate of the severance tax with regard to oil increased.
I. Decrees of the Government of the Russian Federation 1. “ON ADOPTION OF THE RULES FOR ALLOCATION OF THE GRANTS TO THE SUBJECTS OF THE RUSSIAN FEDERATION IN ORDER TO ASSIST ACHIEVEMENT AND (OR) ENCOURAGE ACHIEVEMENT OF THE BEST RESULTS OF THE ACTIVITY OF THE EXECUTIVE BODIES OF THE RUSSIAN FEDERATION” from 14.08.2008 No 608.
Grants in the form of subsidies from the Federal budget are allotted to 20 subjects of the Russian Federation, whose executive bodies achieved the best results by the level and the dynamics of efficiency in the field of the public administration and the increase of the investment attractiveness of the subject of the Russian Federation, supporting health, education and housing complex. The criteria for achievements in these spheres as well as the procedure for the calculation of the amount of the grants, which are no less than RUR 5 mln, were established. It was also stated that the project of the act on grants allotment is to be submitted annually to the Government of the Russian Federation before September by the Ministry of the Regional Development on concordance with the federal executive bodies concerned.
2. “ON MAKING CHANGES IN THE DECREE OF THE GOVERNMENT OF THE RUSSIAN FEDERATION FROM 18 JULY 1996 NO 841”from 15.08.2008 No 613.
The List of the types of salaries and other incomes, which are subject to the deduction of the alimony for the under age children was specified. For instance, salary in non-monetary form, commission fee, money allowance and other payments to the persons, deputized for the posts of authorities of the Russian Federation or the subjects of the Russian Federation, posts of the federal state civil service, bonuses for the knowledge of a foreign language, bonus for the activity as a form-master were included in the list.
The changes specify, for example, that the alimony is to be deduced from the sum of wages, accrued for the instructors of primary and secondary vocational education for the hours of teaching above the established or reduced annual teaching load. The alimony is also calculated from the sums of remuneration for the state and municipal pedagogical workers for execution of form-master’s functions.
The alimony is also to be deduced from the incomes of the civil legal agreements, the incomes from the fulfillment of the author’s and allied rights, the incomes from the advocatory, notary activity.
The changes envisage that the alimony is deduced from other payments that the employer makes in concordance with the labor legislation, excluding the sums paid in connection with the birth of a child, the death of a relative, marriage registration, as well as the compensatory payments for the business trip, transfer, employment or direction for the work in another region, for the wear and tear of the equipment that belongs to the employee.
For instance, survivor’s pensions, paid from the funds of the federal budget, and payments added to them at the expense of the budgets of the subjects of the Russian Federation, as well as the pregnancy and childbirth benefits, are excluded from the list.