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More privatisation doubts
BusinessNewEurope - bne.eu - 5.23.12 - JRL 2012-94

Hardly is a new pro-privatisation government in position, than the backtracking starts - presidential decree putting controlling stakes of oil major Rosneft, and power sector companies Rushydro, Federal Grid, and MRSK Holding on the list of strategic entities. In fact the decree was issued May 21 on the eve of the appointment of the new government. Presidential press secretary Dmitry Peskov helpfully specified that this "prevents privatization" of these utilities.

Boardroom with Empty ChairsWhat role the move will play in a new privatization timetable to be drawn up by first deputy prime minister Igor Shuvalov on orders of prime minister Dmitry Medvedev remains to be seen. The move might indicate that the Kremlin want to have the final decision and take responsibility for any privatization - or that the plans to sell down stakes in these companies to a 50% controlling stake - thus 8% of RusHydro and 4% of Federal Grid Company - have been put on ice, for what ever reason.

"The privatization ban came into effect just before the appointment of the new government. Thus, new officials views on privatization, including those of Energy Ministry Alexander Novak and Deputy Prime Minister Arkady Dvorkovich could differ from the position of the previous government," write Uralsib analysts. "The timing of the potential privatization is now in the hands of the president, and utilities are unlikely to be privatized in the near future."

With Igor Sechin's move to head oil giant Rosneft a brake on plans to sell down the state stake in this sector too, it only remained for doubt to be cast on plans to sell stakes in state-owned Sberbank, Russia's largest. Interfax quoted the CBRs first deputy chairman of Russia's central bank Alexei Ulyukaev saying May 22 that there is no hurry to sell a 7.6% stake in Sberbank, with the central bank (which holds the stake) aiming first and foremost for a high quality deal, and therefore to target both a price level previously named as RUB 100 per share, and high demand.

"This signals that the SPO is likely to be delayed until summer - autumn 2012," write VTB analysts. "Meanwhile, we think that further uncertainty over the timeline for privatisation will keep the price overhang and cap the price performance, putting fundamentals into the backseat," they add.

Keywords: Russia, Economy, Business, Investment, Trade - Russian News - Russia

Hardly is a new pro-privatisation government in position, than the backtracking starts - presidential decree putting controlling stakes of oil major Rosneft, and power sector companies Rushydro, Federal Grid, and MRSK Holding on the list of strategic entities. In fact the decree was issued May 21 on the eve of the appointment of the new government. Presidential press secretary Dmitry Peskov helpfully specified that this "prevents privatization" of these utilities.

Boardroom with Empty ChairsWhat role the move will play in a new privatization timetable to be drawn up by first deputy prime minister Igor Shuvalov on orders of prime minister Dmitry Medvedev remains to be seen. The move might indicate that the Kremlin want to have the final decision and take responsibility for any privatization - or that the plans to sell down stakes in these companies to a 50% controlling stake - thus 8% of RusHydro and 4% of Federal Grid Company - have been put on ice, for what ever reason.

"The privatization ban came into effect just before the appointment of the new government. Thus, new officials views on privatization, including those of Energy Ministry Alexander Novak and Deputy Prime Minister Arkady Dvorkovich could differ from the position of the previous government," write Uralsib analysts. "The timing of the potential privatization is now in the hands of the president, and utilities are unlikely to be privatized in the near future."

With Igor Sechin's move to head oil giant Rosneft a brake on plans to sell down the state stake in this sector too, it only remained for doubt to be cast on plans to sell stakes in state-owned Sberbank, Russia's largest. Interfax quoted the CBRs first deputy chairman of Russia's central bank Alexei Ulyukaev saying May 22 that there is no hurry to sell a 7.6% stake in Sberbank, with the central bank (which holds the stake) aiming first and foremost for a high quality deal, and therefore to target both a price level previously named as RUB 100 per share, and high demand.

"This signals that the SPO is likely to be delayed until summer - autumn 2012," write VTB analysts. "Meanwhile, we think that further uncertainty over the timeline for privatisation will keep the price overhang and cap the price performance, putting fundamentals into the backseat," they add.


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