Summary:
- Economic growth in Russia is expected to presume to be flat for 2010
- Recovery is not expected until 2011, based on consumption levels
- Recovery plans for Russia are not investment driven – could have a negative impact on the growth of industries
- Banking sector has been experiencing an increase in retail deposits
From... United Bank of Switzerland Daily News Report:
Headline: Banking – New Mechanism for Subordinated Loans for the State is Approved
- The Federation Council has approved amendments to the law
- Implied that banks applying to the state for a subordinated loan for a second time will be able to receive triple the amount of funds
- Interest rates on such loans will increase from the previous 8% to 9.5%
From... Alpha Bank Morning Brief:
Headline: Russian Government Expects Recovery to Start in 2011
- Economic growth is expected to be flat – due to decline I investment and stable unemployment rate
- Investment decline in 2010 suggest that the Russian government does not intend to generate an investment-driven economic recovery – expects consumption to remain the key growth driver
- Inflation remaining high at 10% in 2010 and 8% in 2011 – recovery based on consumption would trigger increase in imports
- The government expect imports to remain stable in 2009 and 2010
- This could hurt the trade balance and not lead for growth for domestic industries
- .1% GDP growth in 2010 looks optimistic
From... Deutsche Bank Morning Comment:
Headline: 2Q09 Net Capital Inflows Amount to $7.2B USD
- Net private sector capital inflows amounted to $7.2B
- Factors contributing to the change are: stabilization of the ruble, increase in oil prices, and gains on equity market
Headline: Retail deposits grow 2% in June
- Retail deposits at 6 of the leading banks grew 2% in June
- Data suggests that the retail deposit market has grown 9% YTD
- Provides some upside risk to current estimate of flat growth
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