THE NEW PRIME MINISTER OF BRITAIN
The former mayor of London and former British foreign Secretary Boris Johnson on Wednesday took office as Prime Minister, succeeding retired Theresa may. He became the 14th head of government with Queen Elizabeth II, which according to the tradition, asked him to take this position. Johnson has managed to produce the largest change of government in the modern history of Britain without the transfer of power from one party to another, appointing to key positions of his men. In addition, he promised in any case to bring the country out of the EU on October 31, not excluding the scenario of a hard divorce without an agreement. London is ready to act “firmly and mercilessly”, say the experts, expressing the view that such a scenario will become a reality under it Johnson and “sharpened” his office.
The EU does not intend to resume negotiations with the UK under the terms Brexit, however, according to experts, with the arrival of Johnson the old paradigm, designed for “compromising” position may, collapsed. Now with a new balance of power will have to be considered, and that Brussels will have to find a way out of the impasse. Johnson, in turn, is ready to build a new relationship with the EU. He promised to reach an agreement that will benefit both parties, and gave promise of living in the country the Europeans to retain their rights after Brexit. In addition, the new Prime Minister is ready to increase financing of the social sector, police and education, finding opportunities to save money, even if the hard scenario. He also announced one of its priorities the war with the opposition to complete its defeat. However, according to experts, it will be difficult — the labour party supports much of the population, which will have to be considered.
This week began the “marathon” of meetings of the Central banks, in which regulators decide on the interest rate. Started the ECB on Thursday announced the decision to maintain the rate at zero level — unchanged from March 2016. The Deposit rate remained at minus 0.4 percent, the marginal rate remained at the level of 0.25%. Thus, the ECB decision coincided with forecasts of experts. The regulator expects that rates will remain at current or lower level until the first half of 2020. The softening of rhetoric of the regulator gives us grounds to expect a new round of quantitative easing in the near future, the ECB plain text instructed to prepare the relevant committees. We also learned that the key rate reduced the Bank of Turkey to 19.75% from 24%
On Friday, the CBR also made in line with global trends, confirming analysts ‘ forecasts, it lowered the key rate by 0.25 percentage points to 7.25% per annum. This was the second decline this year. In its commentary, the regulator kept the signal that may further reduce the key rate at a future meeting. Next week the decision on rates should make fed and the Bank of Japan, traders are also hoping for easing of monetary policy.
SUCCESSFUL SPO OF “GAZPROM”
On Friday, two subsidiaries of Gazprom, registered in the Netherlands and in Cyprus, completed the sale of 2.93% of the company shares, free float would increase to 46.02%. The placement price was set at 200,5 ruble per share, which is 5.4% below the value of the securities at the end of trading before the announcement. The total price corresponds to the cost of a hosted package is about 139 billion roubles, and evaluation of all company’s 4.75 trillion. Investor demand within the SPO should be as high as 1.4 times greater than supply, however, Gazprom is focused on Russia and eventually sold all to one investor. It helped to avoid the volatility of quotations. The company has estimated the final price as attractive, expressed satisfaction with the results largest 2012 embed.
Now the group is waiting for a significant increase in market capitalization. After conducted the SPO is expected to increase the weight of its shares in the MSCI Russia index, and it will create an additional inflow of funds from passive investors. Despite the discount, the value of the shares of “Gazprom” on the exchange grew, continuing to play improved dividend policy, experts say. After 16 July, when there was a dividend cut, the shares of “Gazprom” in seven trading sessions, fell in price by more than 13%, and on Friday they almost returned to the levels of “before clipping”.
USA HAS PUSHED THE DEBT CEILING
On Tuesday, the US President Donald trump said that the US administration reached the agreement with Congress on the debt ceiling and the budget for two years. Democratic leaders in Congress also announced that the White house agreed to temporarily suspend the debt limit until 31 July 2021. At this point still will have to pass a vote in Congress, but the problem, according to most experts, is expected. Removing the bar, the US got rid of the regulation the annual trouble getting a limit. With the arrival of trump’s increased military spending, so predictable, and the growth of public debt. Perhaps Trump is committed to implement other projects — for example, odious as the wall on the border with Mexico.
Apparently, the budget deficit is not going anywhere, as it is associated with spending cuts, what I do not like voters on the eve of a new election cycle to mess with this no one will. If this goes on, in 2028 the national debt could reach 96% of U.S. GDP. In most developed countries, similar problems, moreover, their national debt is well over 100% of GDP. According to experts, the growth of government debt will not lead to inflate the next bubble, it can only do more risky and unsecured tools. However, in the case of large-scale global crisis consequences for countries where public debt is large, can be more severe and extended in time.
TRANSNEFT DECIDED ON THE COMPENSATION
This week, the Board of Directors of Transneft approved the maximum size of payments to shippers because of an emergency in “Friendship” to $ 15 per barrel of substandard oil. The shipper must document the losses. Do not agree with the Belarusian side, which States that “Transneft” can not unilaterally determine the limits of compensation for dirty oil. It had previously offered the Russian Federation as a compensation to increase the rate of pumping of raw materials 21.7%. Deputy Prime Minister Dmitry Kozak said that the requirements on increase of a tariff is fair, but not to the extent which is declared by the Belarusian side. Not confirmed and the desired of Belarus, the volume of pumping — 59 million tons of oil this year.
In “Belneftekhim” and it is considered that the increase in tariffs for oil transportation via the territory of Belarus and compensation for the foregone revenue is only one of the components of compensation measures. Not yet resolved the questions of compensation to the Belarusian side for processing dirty oil, for the failure of the technological equipment of the refinery, for violation of contract obligations on deliveries of oil products to contractors, for attracting organizations for more funding for planned lost profits and other losses resulting from the incident. In these areas also needs to go counseling, I believe in the company.
DEAL OF THE SAVINGS BANK AND MAIL.RU
On Thursday, Sberbank and Mail.ru Group (MRG) has announced that it will establish a joint venture on the basis of Delivery Club and the “Citymobil”, which will receive 50%. The parties plan to create a leading Russian platform O2O services (online to offline) in the field of food and transportation. The Board of Directors of the JV will include three representatives of the parties and one independent Director. The companies plan to invest in SP to 64 billion roubles under condition of achievement of target indicators on the horizon 12 months after the transaction. It is planned that a binding agreement to establish a joint venture, the parties will sign in the fall of 2019 after receiving all necessary permits from regulators. Brand new SP has not been discussed, is likely to continue the current title. In a few years, the company may go for an IPO.
At the same time, the savings Bank has a joint venture with “Yandex” on the basis of “Yandex. Market”, also the Bank owns 75% of “Yandex. Money.” This SP develops the same direction in what is created the joint venture of Sberbank and MRG — taxi and food. Yandex expects that Sberbank will build a company partnership for long term mutual benefit, is willing to compete and is confident in maintaining its leading position. The Bank, in turn, sees in the new venture of a conflict of interest in relation to the partnership with “Yandex”. Both of the joint project of the Bank and “Yandex” have a certain set of symmetric mutual agreements on the exclusion of competition, the so-called non-compete, which the Bank “Holy abides”.
THE U.S. JUSTICE DEPARTMENT IS PRESSING ON IT GIANTS
The U.S. Department of justice announced the beginning of Antimonopoly investigation against major technology companies, leading in the market. The Ministry intends to find out how the leading online platforms have managed to maintain a dominant position in the market and whether they do the activities aimed at reduction of competition, inhibition of innovation, and any other harm to consumers. The purpose of the investigation — assessing the competitive conditions in the online market and ensure Americans access to free markets that companies compete in providing services. If they revealed the offence, the Ministry will take the appropriate steps to obtain compensation.
According to media reports, the DOJ investigation poses a new threat for companies like Facebook, Google, Amazon and Apple. The names of the companies in the statement were not given, but indicated that the investigation will affect search platforms, social networks and retailers. After its publication shares the aforementioned “four” became cheaper on average by 1%. The impact of the plans of the Ministry to bring order to online market, according to estimates by traders, partly affected quotations to the end of the week.
A MORATORIUM ON INCENTIVES FOR OIL
Russian President Vladimir Putin on Monday instructed the government to impose a moratorium on new measures of state support of development of oil fields until the completion of their inventory. The period of execution of the order to 31 December 2019. And on Thursday it became known that “Rosneft” asks the tax cuts for its Priobskoye field in the annual volume of 460 billion roubles for ten years. This should compensate for the loss of the company for Russian participation in the agreement OPEC+. Because of the limitations of the company from the beginning of 2017 not produced 22 million tons of oil. The Cabinet of Ministers until July 20 was to justify state support of the Priobsky Deposit, but if it happened — not yet officially reported.
Experts recognize that production at Priobskoye and other old fields for companies becomes less profitable due to natural depletion, but indicate that “Rosneft” in its requests for compensation and the attempts to shift the responsibility for the declining production in OPEC deal+ too “goes too far”. This, in their opinion, was the reason for the Declaration of a moratorium. However, the authorities do not want to leave the oilers without benefits — after careful analysis of their feasibility and the search for optimal measures of support they will be provided. Most likely, it will happen not this year and will be designed to avoid large losses for the budget.
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