Author: Kim Iskyan

ROUNDUP

By Kim Iskyan

150_Regulars_EM_Roundup_Dec-10

Moscow's mayor: Sobyanin

Sergei Sobyanin, the former chief of staff of prime minister Vladimir Putin, was named mayor of Moscow late in October. He succeeds Yuri Luzhkov, who was ousted in September after an intense power struggle that tested the limits of president Dmitry Medvedev's power. The installation of a Putin loyalist to control Russia's economic and political nerve center is a clear reminder of the prime minister's preeminent power base in the Russian political structure.


The latest iteration of the Russian government's privatization program, announced in late October, calls for stakes in 900 state-controlled companies to be sold through 2015, in an effort to raise $60 billion, which will be put toward plugging a looming budget deficit. Significant stakes in a number of key companies, including state banks VTB and Sberbank, oil producer Rosneft and hydroelectric utility RusHydro, will be on the block, although the government will retain control over all strategic assets. Analysts expect the desire to bolster revenues from privatization to prompt the government to continue efforts to improve the perception of the investment environment, although implementation of the privatization program will probably remain slow and uneven.


Russian internet firm Mail.ru raised $912 million in a London Stock Exchange IPO, and the shares surged 31% in the first day of trading, making it one of the most successful Russian stock offerings ever. Russia's IPO pipeline is bulging with Russian issuers, all aiming to get to market before liquidity is drawn out by anticipated government privatization sales next year.


A group of armed, masked police swarmed the offices of oligarch Alexander Lebedev's National Reserve Bank, in a replay of the raids that happened with alarming frequency in Russia in the 1990s. Among Lebedev's holdings is a stake in the broadsheet Novaya Gazeta, which has been critical of the Kremlin, and there was some speculation that the raid may have been intended to warn Lebedev to keep his journalists in check.


Viktor Chernomyrdin, who founded gas giant Gazprom following the dissolution of the Soviet Union and served as Russia's prime minister from 1992–1998, died early in November at the age of 72.