Monday Digest #79
Weekly summary of finance, economic and tech news. Vision from Russia. With 💜
Committee of the House of Representatives of the USA approved the bill, which toughens a sanctions policy towards Russia and prevents its softening up to the implementation of Moscow of its obligations under the Minsk agreements and the restoration of sovereignty of Ukraine over Crimea.
The text of the bill:
- Obliges to regularly report about the banks that illegally control the Ukrainian assets. Particularly, the statement is about the Russian banks in Crimea.
- Foresees the implementation of the limits for Russia to buy military technology and equipment from NATO partners and is aimed to prevent the violation of the individual’s rights in the territories under Russian control.
- Calls up to develop a strategy that allows to prevent “Russian propaganda” in Russian speaking regions of countries that have common borders with Russia.
- Offers to popularize the “law of Magniskiy” in the territories that are under Russian control in any means. It means Crimea, Abkhazia, South Ossetia and Transnistria.
Turkish lira has showed a rapid fall after the military coup.
It is a potential trigger to the oil prices growth (in short) and to the growth of the USD against the currencies of developing countries currencies, since the mechanics market usually overestimates the risk groups.
What is more, it is the risk for RUB because of the risk of the wars in the contiguous territories of Russia and Turkey.
SnP500 has renewed its MAXIMUMS in the history of the world.
“ …There will be a growth of the US market and SnP500 will test its maximums…”- said the managing partner of the Dream Team Investments on the air of the Euronews “Markets” on 13.06.16.
For the first time Germany placed its bonds with negative rates.
The quality of asstes in Russian banking system may be even worse, than the official data says, if one makes the adjustment for the actual quality of restructured loans, erroneous or inaccurate classification of certain loans and practice of outbalance of bad assets over off-balance sheet affiliates.
The banking system of Russia is stable now, but it is damaged by the serious risks, the main is the quality of assets.
Even if Russia manages to escape from the further deterioration of the macroeconomic situation, the losses of the banks on bad loans can be “significant”.
Because of that fact credit institutions can be in need for new investments.
The surplus in current account in January — June 2016 compared with the same period of 2015 decreased by almost three-fold — from $ 46.5 billion to $ 15.9 billion.
The current account balance in Russia is formed under the pressure of the great decrease in prices of export in the conditions of low prices for the raw materials? the restoration of the imports and the decrease of the deficit of the balance of the services and the balance of the investment incomes.
Swiss bank Credit Suisse closes the business of the providing the services to the wealthy Russian clients and moves their assets to Switzerland.
Credit Suisse — the last of the three global banks that after ten years of work closes its business with the millionaires in Russia.
The year before Deutsche Bank, which branch of private banking had worked since 2003, closed due to global reorganization and the cut of the expenses.
One more western bank UBS began to develop its business in 2007, but had managed to work for less than 3 years and had closed shortly after global crisis.
#macro #finance
The Prime Minister of Japan, after the confident wining of the ruling coalition during the votes, made the arrangement about the new measures of the economic stimulus against the background of the recession in the corporate sector due to low demand.
He did not mention the specialties of the scales, but the japan assets jumped up to 4% and yen weakened due to the expectations of the freedom of the prime minister to plan the economic policy after the voting to the upper house of parliament.
The recession in regions of Russia is still there: the index of the regional economic activity in may was 42%. The index is calculated according to the five sectors -industry, construction, retail and wholesale trade, paid services.
All of the regions were in the zone of depression in may, except Crimea. The worst situation is Northern Kavkaz and in Ural regions where the index of the economic activity is significantly lower than in the country.
The situation in the sectors in regions is close to the Russian as a whole, the consumer crisis and the downturn in the construction industry is also observed.
The Bank of England saved the interest rate on the record low rate of 0.5% annually and approved the amount of its purchase of assets from the market in the amount of 375 billion pounds.
Last week on Wednesday there was an assignment of the new Prime Minister and the Cabinet of Ministers in Britain.
The new Prime Minister is Interior Minister Theresa May.
According to the analytics from bank Merrill Lynch, the appointment of the new Prime Minister and the Cabinet of Ministers in Britain earlier than it was expected partly removed the uncertainty about the political and economic risks. However, the picture as a whole did not change and Britain is still in the beginning of the long and hard way.
The government of Venezuela nationalized the American firm of the Kimberly-Clark corporation, which makes the hygiene products.
The factory was confiscated after the company had stated about the delay of the production due to lack of the raw materials in the country. It is not the first company in Venezuela came to harm due to the deep crisis.
The country can also have a gold lost a billion dollars: a year ago when the Venezuela ended up with no money, the government decided to make a swap-agreement with the Citigroup converting part of its gold reserves to the money.
The situation even became worse after a year and recently the Citibank has announced to close the bank accounts of Venezuela, at least one among which will give an access to the gold reserves a billion dollars. The Citigroup is likely to get all the gold.
#COMMODITIES
The price of wheat exported from Russia has fallen for the last week by 4%, having reached on a minimum of a point $165 for metric ton.
Prices of corn fall the last four weeks — the reasons are unexpectedly big crop and strengthening of ruble.
>>#strongruble is not profitable to the Russian exporters
Bloomberg: Oiltraders have increased fleet of the ships deployed in the North Sea for storage of raw oil.
It is one more sign of the flat demand which has led to accumulating of the largest inventories in the sea since 2009.
Inventory accumulation shows that even when excessive production will disappear, and the global markets will reach balance, process of recovery will be uneven.
We will remind that growth or reducing inventories strongly depends on existence in the market of contango (difference between distant and near futures contracts).
In the presence of an essential difference between the prices, traders have an excellent opportunity to earn money literally from nothing: they buy oil in the spot market or under the contract with the next delivery, at the same time sell the futures with delivery in the future.
As soon as “the difference” extends, active participants of the market begin to sell distant futures and to warehouse oil, for example, in the North Sea.
Now everything changes — the contango is insufficiently big to make oil storage profitable>> the effect of contango vanishes on the market.
Besides, in addition to the oil industry, banks which financed all this also suffer losses. For reference: banks of the EU have already issued to oil industry more than $200 billion, recently Asian banks also have joined them.
The OPEC has increased oil extraction to a maximum since 2008.
#interesting
Renaissance Technologies, one of the most famous hedge funds in the world, has decided to patent unusual technology which can give it advantage before best high-frequency (HFT) traders.
The patent request contains the description of a new method of synchronization of trade at the exchanges all over the world, including difficult algorithms, a set of computer servers, and also an atomic clock to which the central part in synchronization of requests is assigned.
Due to phenomenal success of Pokemon Go the Nintendo company was included into the twenty of the largest Japanese companies, Financial Times reports.
On Friday stock quotes have risen in price for 9,8% having reached ¥27280 ($258,38) per share, and market capitalization of the company has constituted ¥3,93 trillion ($37 billion) that at the level with Sony and Mizuho bank of Japan, the second for the size.
Today in the USA Pokemon GO plays more people, than Twitter use, at the same time they spend 43 minutes a day on average for catching of Pokemons.
The American producer of the hard drives Seagate plans to lay off about 6,5 thousand employees by the end 2017 financial year- it is 14% of personnel of the company.
Despite improvements of forecasts for the income (Seagate revenue, assumedly, has constituted $2,6 billion while analysts expected $2,3 billion), the company is still forced to reduce own expenditure considering the general economic situation influencing business of the producer.
Fight for resources accrues: China for several decades conducts dispute with some countries of the region, in particular with Philippines, Brunei, Vietnam and Malaysia, about territorial accessory of a number of islands in the South China Sea on which shelf considerable inventories of hydrocarbons have been found.
According to the resolution of Hague Court, China cannot apply for an exclusive economic zone near Spratly islands and has no “the historical rights” to disputed grounds.
The American company Atieva sponsored by the Chinese and Japanese investors has published a video with drag arrival of the prototype of Edna against a sedan Tesla Model S and the Ferrari California supercar.
The test car has won arrival, having accelerated from 0 to 96 km/h in 3,08 seconds.
#opinion [Press]
DTI managing partner Aleksandr Butmanov at Kommersant, 15 July 2016: “To revalue the rubble is to hurt the exporters”.
More at: http://www.kommersant.ru/doc/3038390
