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Russia: Sargut Buys 21% of MOL for $1.8 Billion

Cash rich oil producer Surgutneftegaz agreed to buy 21 percent of Hungarian refiner MOL from Austrian oil and gas company OMV for 1.4 billion euros ($1.8 billion).

Cash rich oil producer Surgutneftegaz agreed to buy 21 percent of Hungarian refiner MOL from Austrian oil and gas company OMV for 1.4 billion euros ($1.8 billion). The purchase appeared to give Surgutneftegaz a controlling stake in the refiner, which listed the largest portion of its shares, 24 percent, as belonging to "foreign investors (mainly institutional)" as of December 2008. "The purchase of an interest in MOL will be a serious basis for the start of long-term mutually beneficial cooperation between our companies," Surgutneftegaz chief Vladimir Bogdanov said in the statement.

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Russia May Reduce Investments in U.S Treasuries

Russia currently has about $140 billion worth of investments in U.S Treasuries. First deputy chairman of Bank Rossii, Alexei Ulyukayev, announced that some reserves were going to be moved into International Monetary Fund debt. On May 26, Finance Minister Kudrin said that Russia will purchase $10 million of IMF bonds from the reserves while China may buy about $50 billion, according to Dominique Strauss-Hahn, IMF's Managing Director.

Russia currently has about $140 billion worth of investments in U.S Treasuries. First deputy chairman of Bank Rossii, Alexei Ulyukayev, announced that some reserves were going to be moved into International Monetary Fund debt. On May 26, Finance Minister Kudrin said that Russia will purchase $10 million of IMF bonds from the reserves while China may buy about $50 billion, according to Dominique Strauss-Hahn, IMF's Managing Director. Investors are cautious about U.S assets now that the budget deficit is predicted to reach $1.75 trillion by September 30, a large jump from last year's budget deficit of $455 billion, as reported by the Congressional Budget Office, while there are no strong attempts to get the fiscal deficit under control. Ulyukayev, announced that Russia will reduce the share of U.S Treasuries now that a "window of opportunity for working with other instruments is opening," according to Interfax news wire.

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Russian GDP Shrinks 7 Percent

The Russian economy shrank by 7 percent in the first quarter according to Deputy Economic Development Minister Andrei Klepach.

The Russian economy shrank by 7 percent in the first quarter according to Deputy Economic Development Minister Andrei Klepach. "These figures are worse than we expected," Klepach said. The government has predicted that the economy will shrink by 2.2 percent in 2009 and are still holding on to that prediction after the release of the first quarter numbers. The 2.2 percent forecast takes into account multiple stimulus packages that are currently being debated to help improve domestic demand. Without the stimulus packages, Klepach said the economy could contract by 4 to 5 percent.

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Russia: Gas Output Dropped Sharply in March

Gazprom's March gas production slumped by one-quarter from a year ago as demand shriveled in Europe and at home and buyers delayed purchases in hopes that prices would fall.

Gazprom's March gas production slumped by one-quarter from a year ago as demand shriveled in Europe and at home and buyers delayed purchases in hopes that prices would fall. Energy Ministry data showed Thursday that the gas export monopoly's output last month was 1.24 billion cubic meters per day, down 12 percent from 1.41 bcm per day in February 2009 and 24 percent down from 1.63 bcm per day in March 2008. "Such low production levels have been unseen over the past decade, even during summer months, when Gazprom puts some wells on planned maintenance," he said.

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Russian Food Retailer to Expand Aggressively

Regional food retailer Magnit reported better-than-expected 2008 results for net income and revenue on Wednesday, and it pledged to carry its aggressive expansion plan into 2009.

Regional food retailer Magnit reported better-than-expected 2008 results for net income and revenue on Wednesday, and it pledged to carry its aggressive expansion plan into 2009. CEO Sergei Galitsky said in a statement that Magnit opened 385 new stores in 2008, bringing its total to 2,579 at the end of the year. The Krasnodar-based discounter said the openings helped it boost profits 93 percent under international financial reporting standards. Magnit, Russia's second-largest grocer after X5 Retail Group, plans to invest 5.6 billion rubles ($165 million) to open 300 stores this year as well as six to nine hypermarkets, Galitsky said later in a conference call.

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Russian Home Building on the Rise

The number of homes completed in the first two months of this year surpassed the number in the same period last year, Regional Development Minister Viktor Basargin said Monday.

The number of homes completed in the first two months of this year surpassed the number in the same period last year, Regional Development Minister Viktor Basargin said Monday. About 5.86 million square meters of housing were completed in January and February, he said, without citing an earlier figure. "We have been able to completely maintain the positive dynamic of housing construction in Russia," he said, Prime-Tass news agency reported. The situation varies around the country, however, and construction is only rising in 49 regions, he said.

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French Alstom to Buy Stake in Russian Train Maker

French engineering giant Alstom said Tuesday that it had agreed to acquire a 25 percent stake in train maker Transmashholding for an undisclosed total amount.

French engineering giant Alstom said Tuesday that it had agreed to acquire a 25 percent stake in train maker Transmashholding for an undisclosed total amount. At a news conference in Paris, Alstom chief executive Patrick Kron said the French train and power plant builder would make a down payment of 75 million euros ($99 million), with the rest of the price to be determined based on TMH's performance over the period from 2008 to 2012. Kron called the agreement "a major event for Alstom and for French-Russian cooperation."

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Central Banker Sees Interest Rate Cut in Russia

The Central Bank has been taking flak from all sides lately over its insistence on maintaining what critics call "crippling" and "bankrupting" interest rates, a policy endorsed by the prime minister to keep lenders operating above the level of inflation.

The Central Bank has been taking flak from all sides lately over its insistence on maintaining what critics call "crippling" and "bankrupting" interest rates, a policy endorsed by the prime minister to keep lenders operating above the level of inflation. But in a reversal that could mollify bankers and borrowers -- not to mention VEB chief Vladimir Dmitriyev and Mayor Yury Luzhkov, who both took digs at the Central Bank's monetary policy last week -- First Deputy Chairman Alexei Ulyukayev said Friday that the bank could begin cutting rates as soon as next quarter. The comments, made in an interview on Ekho Moskvy radio, reflect a growing confidence that inflation will begin to subside as production plummets and the devalued ruble starts to regain ground against a falling dollar. Prime Minister Vladimir Putin said earlier this month that setting interest rates below inflation would "destroy the economy" -- a position that few have publicly challenged.

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Russia: Sargut Buys 21% of MOL for $1.8 Billion

Cash rich oil producer Surgutneftegaz agreed to buy 21 percent of Hungarian refiner MOL from Austrian oil and gas company OMV for 1.4 billion euros ($1.8 billion).

Cash rich oil producer Surgutneftegaz agreed to buy 21 percent of Hungarian refiner MOL from Austrian oil and gas company OMV for 1.4 billion euros ($1.8 billion). The purchase appeared to give Surgutneftegaz a controlling stake in the refiner, which listed the largest portion of its shares, 24 percent, as belonging to "foreign investors (mainly institutional)" as of December 2008. "The purchase of an interest in MOL will be a serious basis for the start of long-term mutually beneficial cooperation between our companies," Surgutneftegaz chief Vladimir Bogdanov said in the statement.

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Russia to Double its Issue of Bonds

The Finance Ministry will sell 529 billion rubles ($15.7 billion) of treasury bonds this year and issue 50 percent to 100 percent more bonds in 2011 and 2012, Finance Minister Alexei Kudrin said Wednesday, as the government looks for ways to finance a growing budget deficit and increase liquidity in its ailing financial system.

The Finance Ministry will sell 529 billion rubles ($15.7 billion) of treasury bonds this year and issue 50 percent to 100 percent more bonds in 2011 and 2012, Finance Minister Alexei Kudrin said Wednesday, as the government looks for ways to finance a growing budget deficit and increase liquidity in its ailing financial system. The government may also change some of its capital rules in efforts to recapitalize the banking sector, while shying away from the U.S. model of a "toxic assets" fund. The bond issue amounts to nearly twice the amount of paper that the Finance Ministry sold last year, and the amount will increase each year to ease pressure on the Reserve Fund, which will cover this year's forecast 8 percent budget deficit. "This will happen every year -- it is a necessity due to the depletion of the Reserve Fund," Kudrin said in comments posted on the ministry's web site.

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Russia: Budget Slashed for Repatriation Program

The government plans to slash spending on a program aimed at attracting Russians home from abroad due to a disappointing response since the first people started to return in 2007, the Federal Migration Service said Thursday.

The government plans to slash spending on a program aimed at attracting Russians home from abroad due to a disappointing response since the first people started to return in 2007, the Federal Migration Service said Thursday. The program will be cut from 8 billion rubles ($239 million) to 1.8 billion rubles this year under the revised federal budget approved by the Cabinet recently. More than 12,000 Russians have returned under the program, which was unveiled in June 2006 by then-President Vladimir Putin in an attempt to address the country's demographic crisis by attracting Russian-speaking workers.

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