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Kiev hopes to sell state-run companies to US investors – PM

RT | June 9, 2015

Ukraine’s Prime Minister Arseny Yatsenyuk hopes to sell the country’s state-owned companies to the US. American investors will get the assets “on the most transparent conditions” if they decide to invest, he said.

The statement comes ahead of a Ukrainian-American investment conference in Washington on July 13.

“We want to start the privatization process… We want to see American owners on the territory of Ukraine, they will bring not only investment, but also new standards, new ways of managing the companies, and a new investment culture,” Yatsenyuk was cited as saying during his meeting with the representatives of Ukraine’s diaspora in Washington, UNIAN reported on Tuesday. Yatsenyuk and Ukraine’s Finance Minister Natalia Jaresko are in the US capital on a working visit which will last until June 10.

The massive privatization process of Ukraine’s state-run assets is planned for the second quarter of 2015. In April, the Ukrainian government decided to hold a number of investment conferences in Berlin, Paris and Washington to attract investors and to spread the privatization idea. The Prime Minister then said they expect to see American and European entrepreneurs in agriculture, energy, especially in the modernization of the Ukrainian gas transportation system and the mining industry, as well as in other vital sectors of the economy.

Ukraine is facing a deep economic crisis with the country on the verge of a default. Earlier this month, the IMF’s mission in Ukraine said the country’s GDP is expected to shrink 9 percent in 2015, with annual inflation to hit 46 percent. Ukraine’s total debt is estimated around $50 billion, $30 billion of which is external debt and $17 billion internal debt. Public sector debt rose to 71 percent of Ukraine’s gross domestic product, and is due to rise to 94 percent of GDP in 2015, according to the National Bank of Ukraine.

Last year, Ukraine’s President Petro Poroshenko invited foreign citizens to become key ministers in the new government of Ukraine, claiming that he views the foreigners as some kind of “anti-crisis management needed due to the difficult situation in economy”. The natives of the US, Georgia and Lithuania – Natalie Jaresko, Aleksandr Kvitashvili, and Aivaras Abromavicius were approved by the parliament to head up the Ministry of Finance, Ministry of Health and Ministry of Economic Development, respectively. All of them have been granted Ukraine citizenship after a decree amending the law to allow foreigners into the government.

June 9, 2015 Posted by | Corruption, Economics | , , , , , | Leave a comment

China and Russia to launch new credit rating agency in 2015

RT | January 13, 2015

​The new Universal Credit Rating Group (UCRG) is being set up to rival the existing agencies Moody’s, S&P and Fitch, and its first rating will be issued this year.

The setting up of UCRG is in its final stages, ready to challenge the ‘Big Three’ that currently dominate the industry, the Managing Director of RusRating Aleksandr Ovchinnikov told Sputnik News Agency on Tuesday.

“In our opinion, the first ratings [will] appear … during the current year,” Ovchinnikov said, adding that accreditation with the local regulator is already underway.

The news comes on the heels of Fitch’s decision to follow S&P in downgrading Russia’s sovereign credit rating to BBB-, a step above junk level and on par with India and Turkey.

The new agency will be based in Hong Kong, and provide a check on the ‘Big Three’, which some analysts say don’t provide an accurate reading of economic situations.

Many securities and bonds in the US that had triple-A ratings in 2008 and were considered ‘safe’, turned out to be a bubble, revealed by the subprime mortgage crisis.

“When the issue of creating an agency alternative to the ‘Big Three’ [Standard & Poor’s, Moody’s, and Fitch Group] was raised, we in fact offered [a] project that was ready to be launched and was supported by the governments of Russia and China,” Ovchinnikov said.

Developed economies are often given a free credit rating pass, whereas developing economies are assigned more risky ratings, the RusRating analyst said.

UCRG was officially created in June 2013 by China’s Dagon, Russia’s RusRating and America’s Egan-Jones Ratings. Each member will hold an equal share in the venture, with an initial investment of $9 million.

READ MORE:

Fitch downgrades Russia’s credit rating to 1 notch above junk level

China, Russia and the US set up a rival to big three ratings firms

Fitch downgrade will have ‘limited’ effect on Russia

January 13, 2015 Posted by | Economics | , , , , | 1 Comment

New EU economic sanctions to hit Russian oil, defense investments – report

RT | September 4, 2014

The European Union is looking at introducing more economic sanctions against Russia over its alleged role in Ukrainian conflict, targeting the country’s oil and defense industries with investment bans, according to a new report.

EU diplomats have started drawing up new economic sanctions in Brussels, indicating that they could be passed as soon as Friday, The Telegraph reported, citing a three-page document.

The confidential document was reportedly handed over to ambassadors from several European countries this week.

It calls to “prohibit debt financing (through bonds, equities and syndicated loans) to defense companies and to all companies whose main activity is the exploration, production and transportation of oil and oil products and in which the Russian state is the majority shareholder.”

The new wave of sanctions could potentially ban state-controlled Russian oil and defense companies from raising funds in European capital markets, cutting off foreign investment.

“This extension would significantly increase the burden placed on the Russian state to finance its companies,” the document suggests.

The sanctions would affect Rosneft – Russia’s largest oil producer – in turn impacting British energy company BP, which has a 20 percent stake in the company.

Moreover, Russia’s oil prospectors could be blocked off from accessing exploration, production and refinery services.

“Measures could be extended… to provision of future associated services (such as seismic campaign-related services, drilling, well testing, logging and completion services, supply of floating vessels etc) for deep water, oil exploration and production, Arctic oil exploration and production or shale oil projects in Russia,” said the paper.

That may even include “prohibiting the provision of new additional technologies, for instance refining technologies needed to upgrade crude oil to EURO 4 standards.”

The banking sector will also be targeted further, making borrowing money from the EU even more difficult for Russian state-owned companies.

“Possible measures [include] prohibiting EU persons from participating in syndicated loans to major Russian State owned banks and other entities with a view to further restraining access to capital and closing a possible gap in the current regulation,” said the EU document. “[Also] lowering the maturity beyond which certain debt instruments are restricted bringing it form the current 90 days to 30 days.”

READ MORE: France says it cannot deliver Mistral warship to Russia over Ukraine

Some of the measures not being considered at this time, but reportedly being held in reserve, include bans on the purchase of newly issued Russian government bonds and a boycott of non-industrial diamonds.

Aside from the economic measures, other forms of sanctions are also being considered.

“Beside economic measures, thought could be given to taking coordinated action within the G7 and beyond to recommend suspension of Russian participation in high profile international cultural, economic or sports events (Formula One races, UEFA football competitions, 2018 World Cup etc),” according to the document.

AFP reported, citing a source, that the World Cup boycott idea is being considered as a “possibility for later on, not now.”

On Wednesday the president of FIFA, Sepp Blatter, said there was no chance of the 2018 World Cup being taken away from Russia.

“We are not placing any questions over the World Cup in Russia,” the head of world football’s governing body said at an event near Kitzbuehel, Austria, according to the DPA news agency. “We are in a situation in which we have expressed our trust to the organizers of the 2018 and 2022 World Cups.”

“[A boycott] has never achieved anything,” Blatter stressed.

Meanwhile, President Putin has outlined a seven-point plan to stabilize the situation in the crisis-torn region of eastern Ukraine.

Putin also expressed hope that final agreements between Kiev and the militia in southeastern Ukraine could be reached and secured at the coming meeting of the so-called contact group on September 5.

The military conflict has killed 2,593 people since mid-April and displaced over a million Ukrainians, most of whom sought refuge in Russia.

So far, attempts at temporary ceasefires between Kiev and self-defense forces in the past months have failed to improve the situation in southeastern Ukraine. The fighting has continued, with both sides blaming each other for breaking the truce.

September 3, 2014 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , , , , | 1 Comment

China and Russia to establish joint rating agency

RT | June 3, 2014

No more Fitch, Moody’s, or Standard & Poor’s for Russia and China, as they have agreed to establish a rating agency on joint projects, and later, international services, Russian Finance Minister Anton Siluanov said Tuesday.

“The establishment of an independent rating system is being discussed. Many countries would like to have more objectivity in the assessment of rating agencies,” Siluanov said.

“There will be a Russian-Chinese rating agency, which will use the same tools and criteria for assessing countries and regional investments that existing rating agencies use,” the minister said.

June 3, 2014 Posted by | Corruption, Deception, Economics | , , , , , , , | Leave a comment