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Zawya
23-05-2025
- Business
- Zawya
Russian rouble hovers near two-year high against dollar
The Russian rouble hovered close to a near two-year high against the dollar on Friday, buoyed by limited demand for foreign currency and the prospect of month-end tax payments by major exporters that usually buttress the currency. By 0950 GMT, the rouble was up 0.2% at 79.50 per U.S. dollar, LSEG data based on over-the-counter quotes showed, after hitting 79.32 to the dollar, its highest level since June 2, 2023, on Thursday. The Russian currency has strengthened by over 40% against the dollar this year, a rise analysts have attributed to the easing of geopolitical tensions - mainly with U.S. President Donald Trump's administration - and the central bank's tight monetary policy, which has reduced demand for foreign currency. Against the Chinese yuan, the rouble was down 0.1% at 11.05 on the Moscow Stock Exchange. Russia's central bank uses yuan for foreign exchange interventions, and it is the most-traded foreign currency in Russia. The rouble may again test the support level of 11 to the yuan, supported by the stable situation with oil prices, weak foreign currency demand and the approaching peak of monthly tax payments, said Promsvyazbank analyst Bogdan Zvarich. Monthly tax payments usually see exporters convert their foreign currency earnings into roubles to pay local liabilities. Brent crude oil, a global benchmark for Russia's main export, was down 0.2% at $64.31 a barrel. (Reporting by Alexander Marrow; editing by Mark Heinrich)
Yahoo
07-05-2025
- Business
- Yahoo
Amazon's Bezos leads new investment in AI data company Toloka
By Alexander Marrow LONDON (Reuters) -Jeff Bezos' personal firm Bezos Expeditions is leading a $72-million investment in artificial intelligence data solutions company Toloka, which is looking to scale up its business, Toloka told Reuters on Wednesday. Toloka, which helps train and evaluate AI models using a network of human experts and testers, is part of Nasdaq-listed AI infrastructure firm Nebius Group and has worked with Amazon, Microsoft and Anthropic. Amsterdam-based Nebius emerged from a $5.4 billion deal, finalised last year, that split the domestic and international assets of Russian internet giant Yandex in the largest corporate exit from Russia since Moscow's 2022 invasion of Ukraine. Toloka founder and CEO Olga Megorskaya said the Bezos-led strategic investment was a milestone that should accelerate the company's growth, particularly in the U.S. market, and support its development of products through human experts collaborating with AI agents. "There will always be the need for control, verification, and help from human experts to ensure that the result is actually of high quality," Megorskaya told Reuters. Before finalising the split from Yandex, Nebius would have struggled to secure external investment from the likes of Amazon founder Bezos due to sanctions prohibiting U.S. investments in Russia. Chip giant Nvidia was among the investors in a $700 million private placement raised by Nebius late last year. In addition to Bezos Expeditions, Mikhail Parakhin, CTO of Canadian e-commerce company Shopify, is participating in the investment, Nebius said, and will join Toloka's new board of directors as executive chairman. Parakhin said he was excited to be joining Toloka at a time when the demand for world-class AI data expertise is more urgent than ever. Bezos Expeditions did not immediately respond to a request for comment. Nebius said it would continue to support Toloka as a shareholder, retaining a significant majority economic stake, but relinquishing majority voting control. "The important thing about this round is that we gained the needed flexibility to operate independently," Megorskaya said. She said Toloka anticipated another investment round in the future. (Reporting by Alexander Marrow; Editing by Joe Bavier)
Yahoo
17-04-2025
- Business
- Yahoo
Russian barriers to re-entry stymie prospects of Western companies' return
By Elena Fabrichnaya, Alexander Marrow and Gleb Stolyarov MOSCOW (Reuters) - Three months after U.S. President Donald Trump returned to the White House promising a swift end to the conflict in Ukraine and sparking an early flurry of excitement that Western companies could come flooding back to Russia, realism has set in. Moscow is putting up barriers to re-entry for the thousands of companies that halted operations or sold assets in the country after Russia launched its military offensive, according to government officials and four Russian lawyers. Western companies looking to regain market share face tough negotiations, mountains of paperwork and reputational risks, according to conversations with 12 people in Russia's retail, auto and financial markets. Companies including McDonald's, Germany's Henkel and Hyundai Motor secured buyback agreements when exiting, but returning will not be simple as the government moves to keep a grip on strategic sectors and promote domestic production and businesses. "The Russian authorities will not cancel options that outgoing foreigners concluded with Russian companies, but they will put forward additional demands for their implementation," Alexei Yakovlev, head of the finance ministry's financial policy department, said on the sidelines of a Moscow financial forum in early April. Unilaterally abolishing buyback agreements could spawn waves of litigation, lawyer Ekaterina Drozdova of FTL Advisers told Reuters, suggesting that Russia may introduce an 'entrance fee' to raise budgetary funds. A handful of firms are making discreet enquiries, said four people working with foreign companies in Russia, but there are no serious plans while widespread Western sanctions remain in place. Local companies that have filled niches vacated by departed competitors are also lobbying the government to put up obstacles to any return, said another lawyer who asked not to be named. President Vladimir Putin warned in March that companies that "slammed the door defiantly" when leaving would not be allowed to buy back businesses for small amounts of money or displace local operators. The finance ministry has said foreign businesses would be required to invest in local production, research and development, and share technology. People are definitely talking, said a private equity source who works on Russia, but there are no term sheets, let alone deals. Companies that left in 2022 are not coming back any time soon, the person added. The finance ministry and central bank say no foreign companies have applied to return so far. PRICE COMPETITION Russia's top carmaker Avtovaz said Renault faces a bill of at least 112.5 billion roubles ($1.37 billion) to cover investments made since the French carmaker sold its majority stake for just one rouble in 2022. Like many others, Renault has said it has no plans to return in the short term. Even if it did, the hefty cost would be just one consideration. Chinese firms now dominate the sector with a market share of more than 50%, up from below 10% before 2022, all but closing the door to Western rivals, four car market sources told Reuters. Without local production and access to government subsidies, the likes of Mercedes-Benz, Nissan and Volkswagen would be unable to compete on price, they added. "The market has changed," said Alexei Podshchekoldin, president of the Association of Russian Automobile Dealers. "I don't know if the Europeans will succeed," he added, saying they would need to offer cars of the same quality without a higher price tag. Western automakers are very pessimistic, said one car market source, with the paperwork alone making a return before 2027 unlikely. REPUTATIONAL RISK For well-known consumer brands, there is also the reputational risk of resuming operations in Putin's Russia, said four people working in the luxury retail market. Unlike in the auto sector, Russia has not managed to replace luxury brands and many stores in central Moscow are unoccupied as few local players can afford the high rents, said three of the people, all of whom have worked with European luxury giant LVMH in the past. While some fashion brands remain, major players from Zara-owner Inditex and H&M to LVMH and Chanel have either sold assets or halted operations. If brands return, two of the sources said, they will likely seek a smaller footprint, with less retail space and more direct supplies. Moscow will want to limit foreign ownership through mandatory joint ventures, a model already employed with Chinese firms, two Russian lawyers said. Localising IT systems is particularly important, a third added, as companies running foreign servers can completely shut down their businesses with the "push of a button". Local businesses have meanwhile found local IT solutions, said Anton Nemkin, a member of the State Duma's information policy committee. Even in cases where highly specialised software is needed, companies will face logistical, financial and regulatory challenges, Nemkin said, particularly as new laws around information storage have been introduced. "Are they ready to play by the new rules?" ($1 = 82.2000 roubles) Sign in to access your portfolio
Zawya
11-03-2025
- Business
- Zawya
Rouble climbs to near two-week high as Ukraine pummels Moscow with drones
The Russian rouble strengthened to a near two-week high against the dollar on Tuesday, buoyed by subdued imports and hopes for a resolution to the war in Ukraine, even as Kyiv launched its biggest drone attack on Moscow. Ukraine's attack, which saw at least 91 drones target the Russian capital, sparked fires, closed airports and forced dozens of flights to be diverted, Russian officials said. By 0807 GMT, the rouble was up 0.9% at 86.80 to the dollar in over-the-counter market trade, its strongest level since February 27. Against the Chinese yuan, the most traded foreign currency in Russia, the rouble was down 0.1% to 11.89. The rouble is up against the dollar this year, mostly thanks to expectations of improved relations between Moscow and Washington that could produce some conflict resolution in Ukraine and the possible easing of sanctions against Russia. The rouble brushed aside U.S. President Donald Trump's threat last week of imposing banking sanctions on Russia to force it to the negotiating table and was unmoved by Ukraine's drone bombardment on Tuesday. Strong exports, subdued imports and the geopolitical risk premium is keeping the national currency from devaluation, said BCS World of Investments analysts. "The national currency's exchange rate can only devalue if negotiations are disrupted without prospects for their resumption, but this is not the baseline scenario," they said. Brent crude oil, a global benchmark for Russia's main export, was up 0.3% at $69.49 a barrel. (Reporting by Alexander Marrow, Editing by Louise Heavens)
Yahoo
01-03-2025
- Business
- Yahoo
Exclusive: Russia's seizures offer warning to Western firms hoping for Trump-inspired return
By Anna Hirtenstein and Alexander Marrow LONDON (Reuters) - One morning in October 2024, three men entered the Moscow headquarters of Glavprodukt, the largest maker of canned food in Russia. One announced himself as the new director general and said he would now be making the decisions. The men had been sent by Rosimushchestvo, Russia's federal property management agency, according to the company's founder and two people with knowledge of the matter. President Vladimir Putin had decreed that Glavprodukt and other assets ultimately owned by U.S. company Universal Beverage be placed under the Russian state's "temporary management", giving Moscow control over the running of the business. That fate has befallen around a dozen foreign companies, including Danish brewer Carlsberg and Finnish utility Fortum, since Russia invaded Ukraine in February 2022, but Glavprodukt was the first U.S.-owned business to come under Moscow's control in this way. U.S. President Donald Trump's push for a rapid restoration of ties with Moscow, which would presumably entail a lifting of the economic sanctions the U.S. imposed in concert with other Western countries to punish Russia for its invasion of Ukraine, has encouraged speculation about the reversal of such measures. Moscow has even said it expects U.S. companies to return to Russia imminently. But none have yet announced plans to do so, and it is far from clear how Moscow might restore the confidence of traumatised Western investors, let alone restore any of their lost assets. In fact, "temporary management" is one of several ways the state has sought to appropriate assets and redistribute them to regime loyalists, said Septimus Knox, Director, Disputes & Investigations, at risk consultancy S-RM. It has not necessarily been good for business. Glavprodukt's new bosses have not only radically reconfigured the firm but also overseen a drop in sales, according to founder Leonid Smirnov. "They have completely taken away my control of my company," Smirnov told Reuters from Los Angeles. He has lived in the United States since fleeing the Soviet Union in the 1970s, but set up Glavprodukt in Russia in the late 1990s. "A few weeks later, we were looking at Russia's corporate registry online and saw that the owner had changed from us to a division of the Russian Federation. This 'temporary change' does not look so temporary." The U.S. State Department said it was aware of Russia's seizure of Glavprodukt. Rosimushchestvo did not respond to a request for comment. The Russian assets of two European state-owned utilities, Fortum and Germany's Uniper, which both operate power plants in Russia, have been run by Moscow-installed executives for almost two years. French yoghurt maker Danone and Danish brewer Carlsberg had their Russian assets seized and sales forced through to hand-picked buyers. "There are no signs that this process can be reversed and, once a business enters it, its fate is more or less sealed," said Knox. The process is not restricted to Western companies, as the Russian state seizes more and more domestic assets through the courts. In January, a leading grain trader, Moscow's sprawling Domodedovo airport and several strategic warehouses were all ceded to the state. Furthermore, Russia has passed legislation that can identify U.S. property to use as compensation for losses related to its assets frozen overseas. A new law is being prepared that would widen that to other Western nations, sources told Reuters in February. But Moscow's existing legal arsenal is already potent. Carlsberg announced it had agreed to sell its stake in Baltika Breweries to an undisclosed buyer in June 2023, but Russia intervened three weeks later with a Putin decree putting the assets into temporary management. In December 2024, Carlsberg instead sold the stake to two longstanding employees in Russia for roughly $320 million, well below the market value. The government installed its own layer of managers over the heads of the Carlsberg executives on day one of the temporary management, Carlsberg CEO Jacob Aarup-Andersen told Reuters. "From that day on, we lost operational control." Carlsberg no longer had operational insight or access to accounts. "To all intents and purposes, we had lost the asset," Aarup-Andersen said. At Glavprodukt, output and sales have fallen around 10% since October and some suppliers and buyers have cut ties, according to a source familiar with the matter. Office-wide meetings have stopped and yearly bonuses have not been paid, the source said. The new management has started consolidating Glavprodukt's business lines, putting its three factories and around 1,000 employees under one chain of command. Smirnov said he believed this was a ploy to ultimately force a sale at a knock-down price - a fate meted out to many of the Western firms who have decided to leave Russia in the last three years. "When a company's managers are appointed on the basis of their political capital rather than technical competence," Knox said, "it is inevitable that the asset's value and the quality of its operations will suffer." Sign in to access your portfolio
