Summary:
- New macro statistics from Rosstat reveal mixed signals – some improvements on investment, but consumption remains a problem
- Increased budget deficits are forecasted to be problems as it will likely increase throughout 2H09
- CBR introduced new changes to the deposit insurance law, but the change should be temporary and changed once profitability is reached
From... United Bank of Switzerland Daily News Report:
Headline: CBR Introduces Changes to the Deposit Insurance Law
- CBR intends to relax requirements fro banks participating in the Deposit Insurance scheme by eliminating the rule that bans bank participation if they are loss making for two consecutive quarters
- UBS comments that it seems sensible as a temporary measure as banks are building provisions
- Significant number of players, including state-owned banks do not generate positive returns
- Once levels normalize, the CBR will have to introduce a new tool that appropriately tracks the profitability of Russian banks
From... Deutsch Bank Morning Comment:
Headline: Rosstat releases Key Economic Indicators for June
- Investment has improved since May while consumption has weakened further
- Main factor for improvement in investment is business inventories – inventories have bottomed out and companies are likely to start rebuilding them which would be positive for investment
- Weakening consumption could be due to the lag effect of unemployment on consumption
From... Business New Europe Daily News Letter:
Headline: June Macro Data: Still a Mixed Bag
- Russian economy should show stronger signals of recovery in 2H09
- Modest improvement in some key indicators – overall mixed
- Upcoming months should show clearer signals of gradual recovery in output and investment
- Budget situation expected to be more problematic due to an increase in expenditure dealing with anti-crisis measures
- Russia's reserve fund should be the main source of financing
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