London, 22 November 2013 MNI RUSSIA BUSINESS SENTIMENT EMBARGOED UNTIL 9.45 A.M. MOSCOW TIME. MNI Russia Business Indicator Falls to 51.5 In November from 56.3 in October. Future Expectations Hit A New Low. The MNI Russia Business Indicator declined for the second consecutive month, while expectations for the future hit their lowest level since the series began in March.
The MNI Russia Consumer Indicator fell sharply in November, led by a steep decline in respondents’ willingness to purchase a large household item and their expectations for future business conditions.
The MNI Russia Consumer Indicator fell to a new low in April as concerns over household finances, business conditions, and the spending climate increased due to the situation in Ukraine. The indicator declined for the third straight month and was almost 11% below early-2014 levels. Current personal finances improved slightly but future expectations fell, while both current and expected business conditions weakened. Inflation expectations rose to a record high.
The MNI Russia Business Sentiment provides insight into the Russian economy. Based on a monthly poll of business executives, it tracks and predicts Russian economic conditions.
London, 20 December 2013. Russian business confidence ended the year at a record low with the MNI Russia Business Indicator falling to 45.5 in December. Production and New Orders fell sharply. While companies were slightly less pessimistic about the next three months compared with November, the overall weakness of the survey points to a further weakening in growth.
The MNI Russia Consumer Sentiment provides reliable and in-depth analysis of consumer behaviours within the rapidly changing Russian economy. We provide timely intelligence on the state of an important strategic market.
The document summarizes the March 2014 MNI Russia Business Report. It finds that Russian business sentiment declined sharply in March to its lowest level in three months, amid concerns about the economic impact of Russia's intervention in Crimea. Key points from the report are that production, new orders, export orders, and the financial position of companies all declined significantly in March compared to previous months. The economic landscape section notes that Russia's GDP growth slowed to 1.3% in 2013, its lowest since 2009, and that Russia's annexation of Crimea has thrown the country into economic turmoil, forcing a rise in interest rates and downward revisions to growth forecasts.
8 JANUARY 2014 . MNI Russia Consumer Indicator rises to 95.7 in December from 94.8 in November. Consumer Confidence Remains Low. The MNI Russia Consumer Indicator increased slightly in December, having hit a series low in November. Confidence remained weak amid continued concerns over inflation, personal finances and a gloomy business outlook.
The MNI Russia Consumer Indicator increased for the second consecutive month in January to the highest level since October, as current conditions improved sharply. Consumer sentiment rose in eight of the ten major cities surveyed, while concerns over inflation continued to worsen despite a slowdown in official inflation data. The Employment Outlook Indicator deteriorated considerably in January.
The MNI Russia Consumer Indicator fell sharply in November, led by a steep decline in respondents’ willingness to purchase a large household item and their expectations for future business conditions.
The MNI Russia Consumer Indicator fell to a new low in April as concerns over household finances, business conditions, and the spending climate increased due to the situation in Ukraine. The indicator declined for the third straight month and was almost 11% below early-2014 levels. Current personal finances improved slightly but future expectations fell, while both current and expected business conditions weakened. Inflation expectations rose to a record high.
The MNI Russia Business Sentiment provides insight into the Russian economy. Based on a monthly poll of business executives, it tracks and predicts Russian economic conditions.
London, 20 December 2013. Russian business confidence ended the year at a record low with the MNI Russia Business Indicator falling to 45.5 in December. Production and New Orders fell sharply. While companies were slightly less pessimistic about the next three months compared with November, the overall weakness of the survey points to a further weakening in growth.
The MNI Russia Consumer Sentiment provides reliable and in-depth analysis of consumer behaviours within the rapidly changing Russian economy. We provide timely intelligence on the state of an important strategic market.
The document summarizes the March 2014 MNI Russia Business Report. It finds that Russian business sentiment declined sharply in March to its lowest level in three months, amid concerns about the economic impact of Russia's intervention in Crimea. Key points from the report are that production, new orders, export orders, and the financial position of companies all declined significantly in March compared to previous months. The economic landscape section notes that Russia's GDP growth slowed to 1.3% in 2013, its lowest since 2009, and that Russia's annexation of Crimea has thrown the country into economic turmoil, forcing a rise in interest rates and downward revisions to growth forecasts.
8 JANUARY 2014 . MNI Russia Consumer Indicator rises to 95.7 in December from 94.8 in November. Consumer Confidence Remains Low. The MNI Russia Consumer Indicator increased slightly in December, having hit a series low in November. Confidence remained weak amid continued concerns over inflation, personal finances and a gloomy business outlook.
The MNI Russia Consumer Indicator increased for the second consecutive month in January to the highest level since October, as current conditions improved sharply. Consumer sentiment rose in eight of the ten major cities surveyed, while concerns over inflation continued to worsen despite a slowdown in official inflation data. The Employment Outlook Indicator deteriorated considerably in January.
The document summarizes the current economic landscape in Russia. Tensions with Western countries over Ukraine continue, as Russia cut off natural gas supplies to Ukraine over unpaid bills. Russia's economy faces issues like a weakening currency, high inflation, and stalled growth. GDP growth slowed to just 0.9% in Q1 2014, well below forecasts. Industrial production grew in May but car sales declined sharply. Sanctions and tensions continue to weigh on the economic outlook for Russia.
The document summarizes the current economic landscape in Russia. Tensions with Western countries over Ukraine continue, as Russia cut off natural gas supplies to Ukraine. Economic growth remains weak at 0.9% in Q1 2014, down from 1.3% in Q1 2013, due to sanctions and a weakening currency. Inflation rose in May to its highest since 2011. Industrial production grew 2.8% in May, led by a 4.4% rise in manufacturing. However, car sales declined 12.2% in May from a year ago as higher inflation and a weaker ruble hurt consumer spending. The economic outlook remains challenging amid geopolitical tensions.
The Russian economy saw weak growth of 1.4% in 2013 and is expected to grow by only 2.5% in 2014, with inflation remaining high at 6.5% in December. Industrial production contracted by 0.2% over the full year 2013 but rose slightly in December, while retail sales and investment growth slowed. The Russian currency has come under pressure recently amid turmoil in emerging markets. The central bank is allowing the rouble to depreciate to boost growth.
The MNI Russia Consumer Indicator fell 5.4% in March to its lowest level since the survey began in 2013, as concerns over household finances, short-term business conditions, and spending declined sharply due to worries over Russia's actions in Ukraine. Current personal finances reached a series low while expectations for business conditions in one year also fell sharply. Overall consumer confidence in Russia has dropped more than 10% since the start of 2014.
The document summarizes the economic landscape in Russia in April 2014. It notes that Russian GDP contracted in Q1 2014 and full-year growth forecasts have been revised down to just 0.5% due to sanctions and turmoil in Ukraine. Industrial production growth slowed in March while car sales were stable. Inflation remains high and the central bank does not plan to ease monetary policy. The economic outlook is uncertain as tensions in Ukraine continue.
The MNI Russia Consumer Indicator rose for the first time in five months in June, up 2.2% from May, though it remained below year-ago levels. Consumer sentiment increased across most regions except the Urals, where it declined to a record low. Confidence rose in lower income groups but fell slightly among high earners. Respondents were more optimistic about business conditions and purchasing durable goods in the near term, but inflation expectations also reached a new high.
The MNI Russia Consumer Indicator increased for the second consecutive month in January to the highest level since October, partially fuelled by the upcoming Sochi Winter Olympics. The Consumer Indicator rose to 99.3 in January from 95.7 in December, close to the breakeven 100 level which separates weakness from strength.
The MNI Russia Consumer Indicator fell to a new low in May amid rising concerns about household finances, spending on big ticket items, and long-term business conditions. Consumer confidence declined across all income groups, though higher income households were less affected. Consumers expressed growing worries about current economic conditions and the future path of inflation, interest rates, and employment prospects. Spending indicators such as durable buying conditions and car purchases also fell as consumers grew more cautious.
The IMF recently reported that Russia has entered a recession and warned that economic growth will further contract if Western sanctions are increased. The MNI Russia Business Indicator fell sharply in May due to the impact of sanctions over Russia's actions in Crimea. Industrial production growth increased in April but overall economic growth remains weak, forecast at just 0.5% for 2014 compared to original predictions of 2.5% growth. Russia signed a $400 billion gas deal with China aimed at boosting infrastructure investment.
UK retail sales in Q1 likely contracted from Q4 2016, despite their rebound in February.
Falling real wages and slowing household borrowing are likely to further dampen retail sales and consumption growth going forward.
The still large pool of available workers is seemingly limiting their wage-bargaining power, with nominal wage growth falling behind rising inflation.
Moreover, investment growth is still only making a negligible contribution to GDP growth ahead of the British government’s decision to trigger Article 50 on 29th March.
Much of the rise in inflation in recent months is attributable to imported inflation driven by Sterling’s depreciation since November 2015 with little evidence of demand-led inflation.
This situation is reminiscent of 2007-2008 when Sterling’s collapse fuelled imported and in turn headline inflation.
Should Sterling remain broadly unchanged going forward, its year-on-year pace of depreciation, currently around 9%, would slow from June onwards and hit zero towards end-year according to my estimates, in turn dampening imported inflation.
I would expect retailers to stabilise prices to maintain market share in the face of tepid demand and for wage-inflation expectations to remain modest. This was certainly the case in the 12 months to September 2009 with CPI-inflation falling from 5.2% yoy to 1.1% yoy.
The question is whether the BoE is willing to look beyond a potentially temporary rise in UK inflation – as Governor Mark Carney suggested – or whether it tries to short-circuit any self-reinforcing rise in prices.
My base-line scenario is that the BoE will look beyond the current rise in UK inflation, unless at least one of three conditions materialise:
(1) Nominal wage growth accelerates, comfortably outstripping headline inflation and driving consumption growth;
(2) Commercial bank lending picks up significantly; and
(3) Sterling depreciates materially from current levels, exacerbating imported and in turn headline inflation.
I expect that neither (1) or (2) will materialise any time soon and that while risks to Sterling are probably to the downside, Sterling is unlikely to weaken sufficiently to push the BoE into hiking. I would however expect it to keep a possible rate hike firmly on the table.
The document summarizes two possible scenarios for Japan's economy following Prime Minister Shinzo Abe's announcement to dissolve parliament and hold new elections in December 2014. Scenario 1 predicts that Abe's economic policies (Abenomics) could be successful in stimulating growth if he remains in power after the election. Scenario 2 suggests that Japan's recession may continue if the election is costly and fails to build policy consensus, further weakening the economy and potentially forcing Abe to resign. Both scenarios discuss the challenges of Japan's large public debt and aging population.
MNI Russia Consumer Indicator Falls to 94.1 in February from 99.3 in January.
The MNI Russia Consumer Indicator declined to the lowest level since the survey started in March 2013, led by a sharp fall in consumers’ views about the current state of their personal finances, with not even the winter games able to boost sentiment.
How much should we worry about the chinese stock market collapseAmol Patil
- The Chinese stock market has fallen significantly over the past month, dropping 31.7% since July. The Chinese government has taken drastic measures to try and stop the falling stock prices.
- While a falling stock market in China could negatively impact the global economy due to China's role as a major trading partner and consumer of commodities, the exposure of Chinese households to the stock market is relatively low. Most Chinese households' financial assets are held in cash and bank deposits rather than stocks.
- The stock market crash reflects the fact that China's economic growth rate has been slowing in recent years after a long period of double-digit growth. The crash was likely exacerbated by the unsustainable rise in stock prices due to
The document provides an outlook for 2016, summarizing that:
1) China has committed to ensuring 7% growth for the immediate future through government intervention, but rebalancing away from investment is necessary long-term which will slow growth rates.
2) In Europe, GDP growth has accelerated from under 1% to 1.6% since late 2014, supported by ECB monetary easing expanding credit.
3) In the US, growth in construction employment and spending is contributing to a 5% rise in personal consumption and will likely continue supporting the economy in 2016.
The rise in bond yields in developed economies in the past 6 weeks remains one of the over-riding themes as we head into the last seven days of the US presidential campaigns.
Markets are now fretting about the implications for global growth and asset valuations and ultimately whether elevated global risk appetite will correct more forcefully.
Higher international commodity prices, a pick-up in global GDP growth in Q3 and early Q4 and easing deflation fears suggest that interest rate policies in developed economies may have reached an important inflexion point – in line with the view I expressed six weeks ago.
Developed central banks may refrain from loosening monetary policy further near-term, with the exception of the RBNZ and possibly ECB. At the very least, policy-makers will tweak a discourse which has largely focused on doing “whatever it takes”.
Recent US data have paved the paved the way for a 14th December Fed hike, conditional on Democrat candidate Hilary Clinton wining the 8th November US presidential elections.
But with the exception of the Fed and possibly a handful of EM central banks, rate hikes are a story for the latter part of 2017 (perhaps) while further rate cuts remain on the cards in Brazil, Russia, Indonesia and India.
Higher global yields and still uncertain US election outcome are taming global equities and volatility has spiked but EM currencies have still managed to eek out modest gains.
Assuming Hilary Clinton wins next week, I would expect the initial reaction to be a rally in global equities, EM currencies and Dollar and an underperformance of safe-haven assets.
But I would also expect market pricing for a December Fed hike to rise a little further, which could in turn eventually curtail any rally in global equities and EM currencies.
In this scenario, the Dollar would likely end the year stronger, as per my January forecast of a third consecutive year of albeit more modest Dollar gains.
Whether global risk appetite avoids its early 2016 fate will depend on the interconnected factors of underlying macro data and the Fed’s credibility. In any case, market volatility could spike in the run-up to March 2017.
The self-reinforcing sell-off in Sterling and UK bonds has only very recently abated, with markets seemingly taken some comfort from a number of factors including the only modest slowdown in UK GDP growth to 0.5% qoq in Q3.
But optimism over UK GDP data is not warranted as growth has become more unbalanced and slowed in August-September despite a significant easing in UK monetary policy.
Ukrainian Pharmaceutical Market Monthly - Upharmacia - Jan 2018Eirhub
The document provides an overview of the Ukrainian pharmaceutical market indicators for December 2017. Key points include:
- Pharmaceutical exports grew 6% in 2017 to $193.4 million while imports increased 10% to $1767.3 million.
- Retail sales in values grew 16.5% in 2017 to $2731 million and volumes increased 6% to 1685 million units.
- The average cost of a pharmaceutical pack was $1.47 in 2017.
This document provides an analysis of macroeconomic conditions and portfolio recommendations. It analyzes the national economies of the US, Asia, and Europe, finding overall recovery but some weaknesses. International factors like declining commodity prices and tight financial conditions are noted. The document then assesses industries, provides interest and exchange rate forecasts, evaluates specific securities, and recommends a diversified portfolio allocation and hedging strategies to achieve the target 5.78% return over 5 years for retirement investors.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
The MNI Russia Consumer Indicator rose 2.0 points in July to 91.1 after hitting a record low in May, but remains below year-ago levels. Consumers felt better about current finances but were downbeat on the future economy. High inflation remains a key concern despite a slight easing in expectations. Tighter monetary policy and new sanctions will likely weaken growth and sentiment going forward.
The document summarizes India's economic landscape in July 2014. It discusses key points from the government's first budget, recent economic data, and the state of economic growth. The budget aimed to boost growth to 7-8% by promoting manufacturing, infrastructure investment, and reducing the fiscal deficit. However, it lacked details on subsidy reform and GST implementation. Recent data showed easing inflation but industrial growth remains subdued, with GDP at 4.6% in the last quarter. The government forecasts 5.4-5.9% growth this fiscal year but weaker external factors may limit growth to the lower end.
The MNI India Consumer Indicator remained broadly stable in April at 125.2, with consumers in wait-and-see mode before the May 12 general election. The Current Indicator decreased slightly while the Expectations Indicator was stable. Only 40.8% of respondents thought economic growth would improve after the election, with many concerned about government stability and type of coalition. Sentiment improved in seven of ten cities but declined in Delhi, Pune, and Surat. Perceptions of current business conditions and expectations for future conditions increased in April.
The document summarizes the current economic landscape in Russia. Tensions with Western countries over Ukraine continue, as Russia cut off natural gas supplies to Ukraine over unpaid bills. Russia's economy faces issues like a weakening currency, high inflation, and stalled growth. GDP growth slowed to just 0.9% in Q1 2014, well below forecasts. Industrial production grew in May but car sales declined sharply. Sanctions and tensions continue to weigh on the economic outlook for Russia.
The document summarizes the current economic landscape in Russia. Tensions with Western countries over Ukraine continue, as Russia cut off natural gas supplies to Ukraine. Economic growth remains weak at 0.9% in Q1 2014, down from 1.3% in Q1 2013, due to sanctions and a weakening currency. Inflation rose in May to its highest since 2011. Industrial production grew 2.8% in May, led by a 4.4% rise in manufacturing. However, car sales declined 12.2% in May from a year ago as higher inflation and a weaker ruble hurt consumer spending. The economic outlook remains challenging amid geopolitical tensions.
The Russian economy saw weak growth of 1.4% in 2013 and is expected to grow by only 2.5% in 2014, with inflation remaining high at 6.5% in December. Industrial production contracted by 0.2% over the full year 2013 but rose slightly in December, while retail sales and investment growth slowed. The Russian currency has come under pressure recently amid turmoil in emerging markets. The central bank is allowing the rouble to depreciate to boost growth.
The MNI Russia Consumer Indicator fell 5.4% in March to its lowest level since the survey began in 2013, as concerns over household finances, short-term business conditions, and spending declined sharply due to worries over Russia's actions in Ukraine. Current personal finances reached a series low while expectations for business conditions in one year also fell sharply. Overall consumer confidence in Russia has dropped more than 10% since the start of 2014.
The document summarizes the economic landscape in Russia in April 2014. It notes that Russian GDP contracted in Q1 2014 and full-year growth forecasts have been revised down to just 0.5% due to sanctions and turmoil in Ukraine. Industrial production growth slowed in March while car sales were stable. Inflation remains high and the central bank does not plan to ease monetary policy. The economic outlook is uncertain as tensions in Ukraine continue.
The MNI Russia Consumer Indicator rose for the first time in five months in June, up 2.2% from May, though it remained below year-ago levels. Consumer sentiment increased across most regions except the Urals, where it declined to a record low. Confidence rose in lower income groups but fell slightly among high earners. Respondents were more optimistic about business conditions and purchasing durable goods in the near term, but inflation expectations also reached a new high.
The MNI Russia Consumer Indicator increased for the second consecutive month in January to the highest level since October, partially fuelled by the upcoming Sochi Winter Olympics. The Consumer Indicator rose to 99.3 in January from 95.7 in December, close to the breakeven 100 level which separates weakness from strength.
The MNI Russia Consumer Indicator fell to a new low in May amid rising concerns about household finances, spending on big ticket items, and long-term business conditions. Consumer confidence declined across all income groups, though higher income households were less affected. Consumers expressed growing worries about current economic conditions and the future path of inflation, interest rates, and employment prospects. Spending indicators such as durable buying conditions and car purchases also fell as consumers grew more cautious.
The IMF recently reported that Russia has entered a recession and warned that economic growth will further contract if Western sanctions are increased. The MNI Russia Business Indicator fell sharply in May due to the impact of sanctions over Russia's actions in Crimea. Industrial production growth increased in April but overall economic growth remains weak, forecast at just 0.5% for 2014 compared to original predictions of 2.5% growth. Russia signed a $400 billion gas deal with China aimed at boosting infrastructure investment.
UK retail sales in Q1 likely contracted from Q4 2016, despite their rebound in February.
Falling real wages and slowing household borrowing are likely to further dampen retail sales and consumption growth going forward.
The still large pool of available workers is seemingly limiting their wage-bargaining power, with nominal wage growth falling behind rising inflation.
Moreover, investment growth is still only making a negligible contribution to GDP growth ahead of the British government’s decision to trigger Article 50 on 29th March.
Much of the rise in inflation in recent months is attributable to imported inflation driven by Sterling’s depreciation since November 2015 with little evidence of demand-led inflation.
This situation is reminiscent of 2007-2008 when Sterling’s collapse fuelled imported and in turn headline inflation.
Should Sterling remain broadly unchanged going forward, its year-on-year pace of depreciation, currently around 9%, would slow from June onwards and hit zero towards end-year according to my estimates, in turn dampening imported inflation.
I would expect retailers to stabilise prices to maintain market share in the face of tepid demand and for wage-inflation expectations to remain modest. This was certainly the case in the 12 months to September 2009 with CPI-inflation falling from 5.2% yoy to 1.1% yoy.
The question is whether the BoE is willing to look beyond a potentially temporary rise in UK inflation – as Governor Mark Carney suggested – or whether it tries to short-circuit any self-reinforcing rise in prices.
My base-line scenario is that the BoE will look beyond the current rise in UK inflation, unless at least one of three conditions materialise:
(1) Nominal wage growth accelerates, comfortably outstripping headline inflation and driving consumption growth;
(2) Commercial bank lending picks up significantly; and
(3) Sterling depreciates materially from current levels, exacerbating imported and in turn headline inflation.
I expect that neither (1) or (2) will materialise any time soon and that while risks to Sterling are probably to the downside, Sterling is unlikely to weaken sufficiently to push the BoE into hiking. I would however expect it to keep a possible rate hike firmly on the table.
The document summarizes two possible scenarios for Japan's economy following Prime Minister Shinzo Abe's announcement to dissolve parliament and hold new elections in December 2014. Scenario 1 predicts that Abe's economic policies (Abenomics) could be successful in stimulating growth if he remains in power after the election. Scenario 2 suggests that Japan's recession may continue if the election is costly and fails to build policy consensus, further weakening the economy and potentially forcing Abe to resign. Both scenarios discuss the challenges of Japan's large public debt and aging population.
MNI Russia Consumer Indicator Falls to 94.1 in February from 99.3 in January.
The MNI Russia Consumer Indicator declined to the lowest level since the survey started in March 2013, led by a sharp fall in consumers’ views about the current state of their personal finances, with not even the winter games able to boost sentiment.
How much should we worry about the chinese stock market collapseAmol Patil
- The Chinese stock market has fallen significantly over the past month, dropping 31.7% since July. The Chinese government has taken drastic measures to try and stop the falling stock prices.
- While a falling stock market in China could negatively impact the global economy due to China's role as a major trading partner and consumer of commodities, the exposure of Chinese households to the stock market is relatively low. Most Chinese households' financial assets are held in cash and bank deposits rather than stocks.
- The stock market crash reflects the fact that China's economic growth rate has been slowing in recent years after a long period of double-digit growth. The crash was likely exacerbated by the unsustainable rise in stock prices due to
The document provides an outlook for 2016, summarizing that:
1) China has committed to ensuring 7% growth for the immediate future through government intervention, but rebalancing away from investment is necessary long-term which will slow growth rates.
2) In Europe, GDP growth has accelerated from under 1% to 1.6% since late 2014, supported by ECB monetary easing expanding credit.
3) In the US, growth in construction employment and spending is contributing to a 5% rise in personal consumption and will likely continue supporting the economy in 2016.
The rise in bond yields in developed economies in the past 6 weeks remains one of the over-riding themes as we head into the last seven days of the US presidential campaigns.
Markets are now fretting about the implications for global growth and asset valuations and ultimately whether elevated global risk appetite will correct more forcefully.
Higher international commodity prices, a pick-up in global GDP growth in Q3 and early Q4 and easing deflation fears suggest that interest rate policies in developed economies may have reached an important inflexion point – in line with the view I expressed six weeks ago.
Developed central banks may refrain from loosening monetary policy further near-term, with the exception of the RBNZ and possibly ECB. At the very least, policy-makers will tweak a discourse which has largely focused on doing “whatever it takes”.
Recent US data have paved the paved the way for a 14th December Fed hike, conditional on Democrat candidate Hilary Clinton wining the 8th November US presidential elections.
But with the exception of the Fed and possibly a handful of EM central banks, rate hikes are a story for the latter part of 2017 (perhaps) while further rate cuts remain on the cards in Brazil, Russia, Indonesia and India.
Higher global yields and still uncertain US election outcome are taming global equities and volatility has spiked but EM currencies have still managed to eek out modest gains.
Assuming Hilary Clinton wins next week, I would expect the initial reaction to be a rally in global equities, EM currencies and Dollar and an underperformance of safe-haven assets.
But I would also expect market pricing for a December Fed hike to rise a little further, which could in turn eventually curtail any rally in global equities and EM currencies.
In this scenario, the Dollar would likely end the year stronger, as per my January forecast of a third consecutive year of albeit more modest Dollar gains.
Whether global risk appetite avoids its early 2016 fate will depend on the interconnected factors of underlying macro data and the Fed’s credibility. In any case, market volatility could spike in the run-up to March 2017.
The self-reinforcing sell-off in Sterling and UK bonds has only very recently abated, with markets seemingly taken some comfort from a number of factors including the only modest slowdown in UK GDP growth to 0.5% qoq in Q3.
But optimism over UK GDP data is not warranted as growth has become more unbalanced and slowed in August-September despite a significant easing in UK monetary policy.
Ukrainian Pharmaceutical Market Monthly - Upharmacia - Jan 2018Eirhub
The document provides an overview of the Ukrainian pharmaceutical market indicators for December 2017. Key points include:
- Pharmaceutical exports grew 6% in 2017 to $193.4 million while imports increased 10% to $1767.3 million.
- Retail sales in values grew 16.5% in 2017 to $2731 million and volumes increased 6% to 1685 million units.
- The average cost of a pharmaceutical pack was $1.47 in 2017.
This document provides an analysis of macroeconomic conditions and portfolio recommendations. It analyzes the national economies of the US, Asia, and Europe, finding overall recovery but some weaknesses. International factors like declining commodity prices and tight financial conditions are noted. The document then assesses industries, provides interest and exchange rate forecasts, evaluates specific securities, and recommends a diversified portfolio allocation and hedging strategies to achieve the target 5.78% return over 5 years for retirement investors.
« Market Perspectives » est notre revue mensuelle des marchés. Elle présente de la façon la plus synthétique possible :
- notre analyse des principaux faits marquants et indicateurs macro susceptibles de dessiner les marchés sur le mois.
- notre vision sur les différentes classes d’actifs
Cette revue sera continument enrichie avec nos indicateurs quantitatifs.
La plupart de nos analyses sont disponibles sur www.finlightresearch.com
Our monthly publication “Market Perspectives” presents a synthetic view of all the asset classes we cover.
The report is composed of six sections covering Macro, Equities, FI & credit, FX, Commodities and Alternatives.
Each section is preceded by a summary of our views on the related asset class.
Most of our publications are available on our web site www.finlightresearch.com
The MNI Russia Consumer Indicator rose 2.0 points in July to 91.1 after hitting a record low in May, but remains below year-ago levels. Consumers felt better about current finances but were downbeat on the future economy. High inflation remains a key concern despite a slight easing in expectations. Tighter monetary policy and new sanctions will likely weaken growth and sentiment going forward.
The document summarizes India's economic landscape in July 2014. It discusses key points from the government's first budget, recent economic data, and the state of economic growth. The budget aimed to boost growth to 7-8% by promoting manufacturing, infrastructure investment, and reducing the fiscal deficit. However, it lacked details on subsidy reform and GST implementation. Recent data showed easing inflation but industrial growth remains subdued, with GDP at 4.6% in the last quarter. The government forecasts 5.4-5.9% growth this fiscal year but weaker external factors may limit growth to the lower end.
The MNI India Consumer Indicator remained broadly stable in April at 125.2, with consumers in wait-and-see mode before the May 12 general election. The Current Indicator decreased slightly while the Expectations Indicator was stable. Only 40.8% of respondents thought economic growth would improve after the election, with many concerned about government stability and type of coalition. Sentiment improved in seven of ten cities but declined in Delhi, Pune, and Surat. Perceptions of current business conditions and expectations for future conditions increased in April.
The document is a monthly report by MNI Indicators on consumer sentiment in India for July 2014. Some key points:
- The MNI India Consumer Indicator fell slightly from June as consumers were less optimistic about current conditions and future expectations.
- Five of the six components that make up the indicator declined, with personal finances seeing the largest drop.
- Respondents were less confident about their current and future personal finances despite tax measures in the recent budget.
- Sentiment on real estate fell for the fifth straight month while the car purchase indicator rose after an extension of tax cuts.
London, 24 December 2013. The MNI India Business Indicator fell to 57.8 in December from 64.6 in November, the lowest since July. Eleven out of 15 current conditions indicators fell, a disappointing end to what has been a tough year for businesses.
The document is a monthly business report from MNI Indicators on business sentiment in Russia. Some key points:
- The MNI Russia Business Indicator rose in July to the highest level in three months, though it remains below levels at the start of 2014 due to economic weakness and geopolitical tensions from Russia's actions in Ukraine.
- Production conditions for large Russian companies slumped to a seven-month low in July, while new orders and export orders improved for the second straight month.
- Companies have been reducing inventories but the pace of decline has slowed, with the inventories indicator just below neutral levels. Input prices declined for the fourth month in a row.
- Access to credit
London, 22 November 2013 MNI RUSSIA BUSINESS SENTIMENT EMBARGOED UNTIL 9.45 A.M. MOSCOW TIME. Future Expectations Hit A New Low. The MNI Russia Business Indicator declined for the second consecutive month, while expectations for the future hit their lowest level since the series began in March.
The document summarizes the March 2014 MNI Russia Business Report. It finds that Russian business sentiment declined sharply in March to its lowest level in three months, driven by concerns over the economic impact of Russia's intervention in Crimea. Key points from the report are that production, new orders, export orders, and the financial position of companies all declined significantly in March compared to previous months. The economic landscape section notes that Russia's GDP growth slowed to 1.3% in 2013 and its annexation of Crimea has thrown the economy into turmoil, with the possibility of recession.
The document summarizes the March 2014 MNI Russia Business Report. It finds that Russian business sentiment declined sharply in March to its lowest level in three months, amid concerns about the economic impact of Russia's intervention in Crimea. Key points from the report are that production, new orders, export orders, and the financial position of companies all declined in March. The economic landscape section notes that Russia's GDP growth slowed to 1.3% in 2013 and its annexation of Crimea has thrown the country into economic turmoil, with the stock market plunging and sanctions from Western nations.
London, 20 December 2013. MNI RUSSIA BUSINESS SENTIMENT EMBARGOED UNTIL 9.45 A.M. MOSCOW TIME The MNI Russia Business Indicator falls to a record low of 45.5 in December. Production and New Orders fell sharply.
Russian business sentiment fell sharply in May 2014 to its lowest level since December 2013, as the country's military intervention in Crimea and the resulting sanctions from Western countries took a toll on businesses. The MNI Russia Business Indicator declined to 49.2 in May, below the 50 level that separates expansion from contraction. New orders, production, and export orders all contracted further. While companies remained optimistic about their future financial positions, their overall financial health indicator reached a series low. The chief economist of MNI Indicators stated that the survey showed the impact of tensions in Ukraine was clearly affecting Russian companies.
Russian business sentiment improved in July according to a survey by MNI Indicators, with the MNI Russia Business Indicator rising to 54.6 from 50.5 in June. While the initial impact of sanctions has faded, sentiment remains below levels at the start of 2014. New orders and export orders increased in July but production slumped to a seven-month low amid a weak economic backdrop. The outlook remains gloomy as high inflation and interest rates suggest the economy will barely grow in 2014, and further meaningful sanctions could push growth into negative territory.
Russian business sentiment recovered slightly in June from a five month low in May, though it remained considerably lower than at the start of 2014 due to sanctions and economic slowdown. The MNI Russia Business Indicator rose to 50.5 in June from 49.2 in May but was 12.6% below June 2013 levels. Both production and new orders rose marginally in June while export orders increased but remained below the breakeven level of 50. The chief economist commented that while tensions in Ukraine continued, calmer rhetoric and actions on sanctions eased business concerns.
London, 27 November 2013 MNI INDIA BUSINESS SENTIMENT EMBARGOED UNTIL 9.45 A.M. NEW DELHI TIME. MNI India Business Indicator Increased to 64.6 in November from 59.8 in October. Production and New Orders Recover. Thirteen out of the 15 current conditions indicators included in the report increased in November. Employment was the only indicator to decline and Inventories remained unchanged compared with October.
Russia's consumer sentiment hit a new low in May according to MNI's Russia Consumer Indicator, which fell to 87.2 from 88.5 in April, its lowest level since the series began in 2013. Consumers grew increasingly pessimistic about their personal finances, ability to purchase big ticket items, and long-term business conditions amid high inflation, increased loan costs, and expectations that Russia will fall into recession due to its tense situation with Ukraine. Most components of the indicator declined to new lows in May as consumers faced rising prices and interest rates and anticipated a weakening labor market and contracting economy.
Russian consumer sentiment recovered slightly in June after hitting a record low in May, though sentiment remained lower than the previous year due to weak economic growth and Russia's actions in Crimea. The MNI Russia Consumer Indicator rose 2.2% in June, but was still 9.6% below the previous year's level. While purchasing intentions for household goods increased slightly, expectations for personal finances declined to a new low. Inflation expectations also rose to a new high, exacerbating consumers' concerns about high prices and interest rates on loans. The small recovery in sentiment in June was welcomed, but the economist noted that the economic backdrop remained gloomy.
Drawing on data sources such as the Grant Thornton IBR, the EIU and the IMF, this report considers the outlook for the economy, including the growth expectations of 400 businesses interviewed in Russia, and more than 12,500 globally.
The MNI Russia Business Indicator rose sharply in January from a record low in December, increasing to 57.9 from 45.5. Several measures of current conditions and future expectations bounced back, including production, new orders, and supplier delivery times. However, the chief economist commented that while the increase is welcomed, it remains unclear if sentiment will remain improved after the Sochi Olympics, and structural reforms will still be needed to support sustained growth.
The document provides summaries of recent news articles related to the Indian economy:
1) Eminent economist Lawrence Summers says India has the potential to grow at 9% for a decade if bold reforms are taken. However, growth of over 7.5% will require further reforms at national, state, and cultural levels.
2) The ADB kept India's growth forecast unchanged at 7.4% for FY16 and 7.8% for FY17 but warned of downside risks from slow private investment and rural demand.
3) Recent GDP data showed a pick-up in investment demand and manufacturing contribution to growth, but overall growth was on a high base from last year.
The MNI India Business Sentiment is an authoritative indicator of the current pace of overall growth in India. It is based on a monthly poll of Indian executives and delivers an update on all the latest business trends.
London, 27 November 2013 MNI INDIA BUSINESS SENTIMENT EMBARGOED UNTIL 9.45 A.M. NEW DELHI TIME. MNI India Business Indicator Increased to 64.6 in November from 59.8 in October. Production and New Orders Recover. Thirteen out of the 15 current conditions indicators included in the report increased in November. Employment was the only indicator to decline and Inventories remained unchanged compared with October.
The Chicago Business Barometer fell slightly to 54.4 in August from 54.7 in July. While production and new orders softened, they remained above their 12-month averages and up from earlier in the year. Companies continued building inventories at the fastest pace since November 2014 in anticipation of stronger demand in the fourth quarter. Employment rose in August but remained in contraction for the fourth consecutive month, and companies do not plan to expand their workforces in the near term.
The Chicago Business Barometer made a positive start to the third quarter, jumping above 50 after two
months in contraction, leaving economic activity expanding at the fastest pace since January.
- The Chicago Business Barometer remained below 50 in March, pointing to a slowdown in the US economy. The Barometer increased slightly to 46.3 but was still in contraction territory.
- Production increased in March but remained below 50, while new orders and order backlogs rose slightly but remained contracted. Employment also rose slightly.
- While some of the weakness may be due to weather and port strikes, the continued weakness in March suggests a wider slowdown. Purchasers expect orders to pick up in the next quarter but demand remained soft in the first quarter.
The Chicago Business Barometer fell 5.4 points to 60.8 in November from a one year high of 66.2 in October driven by a double digit drop in New Orders.
- The Chicago Business Barometer rose 5.7 points to 66.2 in October, the highest level in one year, fueled by a sharp gain in new orders, which increased to the highest since October 2013.
- Production and employment also strengthened, and order backlogs expanded faster, suggesting continued strong demand and solid economic growth.
- While inflationary pressures eased due to lower oil prices, the domestic economy is growing firmly according to the survey results.
Embargoed until 9:45 a.m. ET, 30 September 2014 The Chicago Business Barometer decreased 3.8 points to a still robust 60.5 in September, as Production and New Orders slowed while fims reported a record rise in stocks and a sharp increase in input prices.
Embargoed until 9:45 AM ET, 29 August 2014 The Chicago Business Barometer surged 11.7 points to 64.3 in August, regaining all the lost ground seen in July, and pointing to continued strength in the US economy.
Russian consumer sentiment increased slightly in July according to a consumer sentiment index. The index rose 2 points to 91.1 in July from 89.1 in June, though sentiment remains below levels from earlier in the year prior to Russia's annexation of Crimea. Consumers felt better about their current economic circumstances but were still downbeat about the future outlook. Pessimism is expected to continue as sanctions over Ukraine's crisis further impact Russia's already weakening economy.
Consumer sentiment in China increased slightly in July according to the Westpac MNI China CSI. The index rose 1.9% due to a sharp recovery in long-term business expectations, though confidence remained subdued. Four of the five components rose between June and July, with the largest increase seen in expectations for business conditions over the next five years. Bank deposits remained the preferred savings vehicle among consumers, followed by wealth management products and real estate.
The MNI India Consumer Sentiment Indicator rose 3.3% in June to 126.2, its highest level since February, as consumers were more confident about future economic growth and household incomes under the new government. All components of the indicator increased except durable buying conditions. Consumers were more optimistic about their personal finances, current and future business conditions, employment outlook, and inflation expectations. The interest rates expectations indicator and car purchase indicator also rose. However, confidence in the real estate market fell for the fourth straight month.
The MNI India Consumer Sentiment Indicator rose to 126.2 in June, its highest level since February, as consumers were more confident about future economic growth and incomes under the new Modi-led government. All components of the indicator increased except durable buying conditions. Business conditions expectations for both the short-term and long-term hit record highs, with the government and its policies cited as reasons for optimism. Consumer inflation expectations fell to their lowest since December 2012. The chief economist commented that the rising sentiment is due to the recovery in the Indian economy and optimism around Prime Minister Modi's ability to revive growth.
The Chicago Business Barometer eased slightly in June but remained at a high level, pointing to a rebound in GDP growth in the second quarter following a sharp fall in the first quarter. While new orders fell from a seven-month high, production rose firmly above 70, close to its level in April. The strength in production and new orders underpinned the Barometer during the second quarter. Some respondents indicated they built inventories ahead of a possible strike by longshoremen at ports. The chief economist commented that while growth in the first half of the year will be slower than initially expected, upcoming data in the third quarter will be important in determining the timing of the first interest rate hike.
Chinese consumer sentiment fell sharply in June according to the Westpac MNI China Consumer Sentiment Index, which dropped 7.1% to its lowest level in nearly a year. Expectations for future business conditions hit a record low as consumers reported concerns about their personal finances and the economic outlook. While sentiment remained above the breakeven level, the decline signals caution about becoming overly optimistic on China's economic growth despite signs of stabilization.
The document summarizes recent economic developments in India. Business confidence rose to its highest level since November 2012 due to optimism around the new Prime Minister's plans. Industrial production grew 3.4% in April, the highest in 13 months, led by manufacturing. However, growth remains subdued at 4.6% and below normal monsoon could push up food prices, challenging interest rate cuts. The new government aims to boost investment, manufacturing and foreign inflows to revive the economy.
The MNI India Business Indicator rose to 69.2 in June from 67.0 in May, reflecting higher optimism among manufacturing companies who expect the new Prime Minister to boost growth. New orders and order backlogs increased to their highest levels in months, while companies planned to expand employment and saw lower inflation. The survey showed signs of a recovery in demand and business confidence in India.
The consumer sentiment indicator in India fell to 122.1 in May, its lowest level since January, as consumers were less optimistic about the future. Four of the five components of the indicator declined, with only durable buying conditions rising. The chief economist noted that confidence had fallen after gains in recent months and that they would have to see the June results to understand the impact of Modi's election as prime minister. However, stock investment indicators rose to a high as investors hoped Modi's reforms would boost economic growth.
The consumer sentiment indicator in India fell to its lowest level since January as consumers were less optimistic about the future. The report was conducted before the election results that showed a clear mandate for Narendra Modi, though polls had pointed to his win. While perceptions about current business conditions deteriorated, consumers were hopeful the new Modi-led government would implement business friendly policies and improve employment conditions and prices. The stock investment indicator reached a series high as stock prices continued rising.
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3. MNI Russia Business Report - November 2013
MNI Russia Business Report - November 2013
Contents
4 Editorial
6 Executive Summary
10 Economic Landscape
14 Indicators
15 MNI Russia Business Indicator
16 Production
17 New Orders
18 Export Orders
19 Productive Capacity
20 Order Backlogs
21 Employment
22 Inventories
23 Input Prices
24 Prices Received
25 Financial Position
26 Interest Rates Paid
27 Effect of Rouble Exchange Rate
28 Supplier Delivery Times
29 Availability of Credit
30 Data Tables
34 Methodology
3
4. 4
Spitzzeile Titel
Russia‘s Broken Growth
Commentators have criticised Russia’s outdated
growth model and now it seems the government
itself has officially joined the band of its own critics.
With a lack of drive to reform, Russia will be left
stagnating.
5. MNI Russia Business Report - November 2013
For years many have called Russia a one trick pony.
It’s been accused of simply living off of its energy
wealth, which in the good times, with high oil prices,
had driven growth to around 7% on average in the
years before the financial crisis in 2008. Commentators
have criticised Russia’s outdated growth model and
now it seems the government itself has officially
joined the band of its own critics.
Increased honesty about the challenges facing Russia
should be welcomed and the downgraded forecasts
for growth put them more in line with other analysts’
views – although some have suggested the gloominess
has gone a bit far. The concern is, though, that Russia
doesn’t have an alternative growth model that it has
confidence in being able to deliver. And with a lack of
drive to reform, Russia will be left stagnating.
“The factors behind the sharp economic growth in the
pre-2008 crisis years are exhausted,“ said Economic
Development Minister Alexei Ulyukayev in early
November, adding that nobody else was to blame but
Russia itself. In the spirit of openness, or possibly
throwing in the towel, Prime Minister Dmitry Medvedev
said that there was no magic bullet to solve Russia’s
growth problems and that if there was he didn’t know
what it was.
Philip Uglow
Chief Economist
MNI Indicators
The Economics Ministry revised down Russia’s long
term growth potential to just 2.5% from 3.4% per
annum through to 2030. It’s a large downward
revision driven partly by the continued meagre growth
seen this year. Third quarter GDP stood unchanged at
just 1.2% on the year in the third quarter and
industrial production has ground to a halt.
The central bank can’t help given the strength of
inflation seen this year. Moreover, with many analysts
and also the World Bank suggesting the Russian
economy is already operating close to capacity,
cutting official interest rates would likely only lead to
more inflation. For years Russia has made use of old
soviet spare capacity and in the meantime failed to
invest for the future.
The lower growth forecasts are a blow to Putin who
has previously promised to raise growth to 5% in a
bid to catch up other major economies. Plans to
modernise Russia, championed more by Medvedev,
such as increasing investment, reducing its reliance
on oil and gas revenues and slashing bureaucracy
and corruption have so far come to nothing. Instead
Russia is still faced with poor infrastructure, an ageing
population and damaging competition from US shale
gas.
5
6. 6
Spitzzeile Titel
Executive Summary
Business confidence tumbled further. The MNI
Russia Business Indicator declined for the second
consecutive month in November following a sharp
rise in September, while expectations for the future
hit their lowest level since the series began in March.
7. MNI Russia Business Report - November 2013
The MNI Russia Business Indicator declined for the
second consecutive month in November following a
sharp rise in September, while expectations for the
future hit their lowest level since the series began in
March.
The Business Indicator posted a reading of 51.5 in
November, down 8.5% from 56.3 in the previous
month, leaving it only just above the series low of
51.3 reported in August.
Businesses believe conditions will continue to worsen
over the next three months, with the Expectations
Indicator falling to 45.0 in November, a new series
low, from 47.2 in October.
The Production Indicator fell to 53.5 in November
from 58.3 in October, a decline of 8.2% on the
month. Production bottomed out in August, moving
into contraction for the first time since the series
started in March. While it has subsequently recovered,
the latest fall puts it below the three month average of
56.6.
Following a strong rise in September, the New Orders
Indicator has declined for the past two months,
dropping to 53.5 in November from 59.5 in October,
a 10.1% monthly fall.
The Employment Indicator fell 7.0% to 47.7 in
November from 51.3 in October. While the majority of
companies continued to report that the number of
employees they currently had was “just right”, there
was an increase in the number of responses that
there were “too many” employees compared with the
previous month.
Order Backlogs fell back into contraction in November
after rising above the breakeven level in October for
the first time since the series started in March.
Input Prices eased for the second consecutive month
in November and expectations for the future fell to the
lowest level since the series began in March.
The Input Prices Indicator declined by 1.5% in
November to 53.4, compared with 54.2 in October,
the lowest since August. Prices Received fell
significantly in November.
The Financial Position Indicator stood at 58.6 in
November, compared with 61.9 in October, a drop of
5.3% on the month.
The Effect of the Rouble Exchange Rate Indicator rose
to a new high of 54.1 in November from 53.4 in
October, showing that more companies believe the
exchange rate is helping business.
MNI Russia Business Indicator
65
60
55
50
45
Mar-13
May-13
Jul-13
Sep-13
Nov-13
7
8. 8
MNI Russia Business Report - November 2013
Overview
Nov -13
Highest
Since
Lowest
Since
3-Month
Average
Monthly
Change
Monthly %
Change
56.3
51.5
47.2
45.0
-
Aug-13
55.6
-4.8
-8.5%
-
series low
49.1
-2.2
-4.7%
58.0
58.3
53.5
-
Aug-13
56.6
-4.8
-8.2%
57.0
48.3
45.5
-
series low
50.3
-2.8
-5.8%
Current Conditions
61.5
59.5
53.5
-
Aug-13
58.2
-6.0
-10.1%
Future Expectations
57.8
48.8
45.5
-
series low
50.7
-3.3
-6.8%
Current Conditions
54.3
52.1
48.7
-
Aug-13
51.7
-3.4
-6.5%
Future Expectations
43.3
41.6
42.1
Sep-13
-
42.3
0.5
1.2%
Current Conditions
52.0
51.8
50.8
-
Aug-13
51.5
-1.0
-1.9%
Future Expectations
49.5
48.7
48.5
-
series low
48.9
-0.2
-0.4%
Current Conditions
49.2
50.3
47.4
-
Aug-13
49.0
-2.9
-5.8%
Future Expectations
43.8
40.4
40.9
Sep-13
-
41.7
0.5
1.2%
Sep -13
Oct -13
Current Conditions
59.0
Future Expectations
55.0
Current Conditions
Future Expectations
MNI Russia Business
Indicator
Production
New Orders
Export Orders
Productive Capacity
Order Backlogs
Employment
Current Conditions
51.0
51.3
47.7
-
series low
50.0
-3.6
-7.0%
Future Expectations
47.5
46.2
46.2
Oct-13
-
46.6
0.0
0.0%
Current Conditions
49.4
48.7
45.7
-
series low
47.9
-3.0
-6.2%
Future Expectations
51.9
51.3
42.6
-
Mar-13
48.6
-8.7
-17.0%
Current Conditions
55.8
54.2
53.4
-
Aug-13
54.5
-0.8
-1.5%
Future Expectations
55.3
51.3
51.0
-
series low
52.5
-0.3
-0.6%
Current Conditions
58.3
58.5
53.5
-
Jul-13
56.8
-5.0
-8.5%
Future Expectations
55.3
50.3
50.0
-
series low
51.9
-0.3
-0.6%
Current Conditions
61.4
61.9
58.6
-
Aug-13
60.6
-3.3
-5.3%
Future Expectations
66.9
59.7
56.2
-
Jun-13
60.9
-3.5
-5.9%
Current Conditions
50.8
50.8
50.5
-
series low
50.7
-0.3
-0.6%
Future Expectations
50.3
50.0
50.6
Jul-13
-
50.3
0.6
1.2%
Current Conditions
51.0
53.4
54.1
series high
-
52.8
0.7
1.3%
Future Expectations
50.7
50.7
50.0
-
Aug-13
50.5
-0.7
-1.4%
Current Conditions
51.0
50.3
49.7
-
Aug-13
50.3
-0.6
-1.2%
Future Expectations
49.5
49.5
49.2
-
Mar-13
49.4
-0.3
-0.6%
Current Conditions
54.7
54.9
58.0
series high
-
55.9
3.1
5.6%
Future Expectations
54.9
53.4
52.0
-
series low
53.4
-1.4
-2.6%
Inventories
Input Prices
Prices Received
Financial Position
Interest Rates Paid
Effect of Rouble Exchange
Rate
Supplier Delivery Times
Availability of Credit
9. w
Business confidence
deteriorated further
as the economic
outlook worsened.
11 out of 15 future expectations indicators fell in
November with seven of them hitting the lowest on
record. GDP rose only 1.2% in the third quarter
while manufacturing contracted for the sixth month.
10. 10
Spitzzeile Titel
Economic Landscape
Latest economic data has shown no improvement
in economic growth with both GDP and industrial
production remaining weak. Meanwhile a rise in
inflation will make it more difficult for the central
bank to cut interest rates.
11. MNI Russia Business Report - November 2013
In a stark admission, Prime Minister Dmitry Medvedev
said that there is no magic bullet to speed up Russia’s
growth and there was no one else to blame for the
poor outlook but Russia itself. The economy ministry
cut its long-term growth forecasts to an average of
just 2.5% through 2030 compared with 3.4%
previously. Latest economic data has shown no
improvement in economic growth with both GDP and
industrial production remaining weak.
Meanwhile a rise in inflation will make it more difficult
for the central bank to cut interest rates which it held
steady at its November monetary meeting. On a more
positive note, Russia has made considerable progress
in 2013 towards bolstering its business environment,
climbing 20 positions to 92nd place out of 189 in the
Annual Ease of Doing Business survey compiled by
the World Bank and the International Finance
Corporation.
GDP Growth Remains Weak
Latest data showed GDP rose 1.2% on the year in the
third quarter, unchanged from the growth rate seen in
the second quarter. The disappointing outturn was
attributed to the agriculture sector which experienced
disruption in the harvest in many important rural
regions due to heavy rains in September. Growth in
Economic Growth
15%
10%
5%
0%
-5%
-10%
-15%
2007
2010
GDP Growth y/y %
Source: Federal State Statistics Service of Russia
2013
construction, trade and investment were also weak.
Deputy Economy Minister Andrei Klepach said that
the figures revealed disappointing signs of an economy
that was losing momentum rather than gathering
pace. According to the Ministry’s estimate, the
economy contracted a seasonally adjusted 0.2%
compared with the second quarter.
A fall in the oil price, weak global trade, low domestic
consumption and reduced investment activity (large
infrastructure projects like the Sochi 2014 Olympics
and the North Stream gas pipeline are approaching
completion) are likely to bear down on future growth.
The government expects the economy to grow 1.8%
in 2013 and 3.0% in 2014.
Monetary Policy: Interest Rates unchanged
The central bank left its new key rate - the one week
repo rate at which it lends money to financial
institutions - on hold at 5.5% after the policy meeting
on November 8. The central bank said that it would
continue to monitor inflation and downside risks to
economic growth, adding that it expected economic
growth to remain low in the medium-term.
The bank has been unwilling to cut official interest
rates due to the continued high level of inflation which
rose to 7.4% in May, well above the target of 5.06.0%, before falling to 6.1% in September, only
slightly above the target range. At the October
monetary meeting, the central bank notably removed
from its official statement a reference to “no change
being made to the benchmark rate in the immediate
future”. The central bank has previously cautioned
that it needs to see a continued downward trend in
inflation expectations before it can ease monetary
policy. Higher than expected inflation data for October
reinforces the central bank’s stand to keep interest
rates unchanged.
A quarterly survey by the central bank showed that in
September, more than three quarters of Russians
thought that inflation would outpace wage growth
over the next 12 months. Some 67% of the
respondents said they expected price rises in October
compared with 65% previously.
11
12. MNI Russia Business Report - November 2013
Spike in consumer prices
The September consumer prices data had raised
hopes that inflation would soon fall within the central
bank’s target range, but it accelerated to 6.3% in
October from 6.1% in September. Flooding in the Far
East and limits on imports from Belarus in previous
months have added to inflationary pressures.
Policymakers said the jump in food prices that pushed
up the headline inflation rate in October was
temporary, adding that they expected the rate of
consumer price growth to slow in 2014.
The Central Bank of Russia acknowledges that
inflationary expectations are quite high. The bank‘s
first deputy chief, Ksenia Yudayeva, said that the risk
of inflation topping 6.0% in 2013 has increased and
Russian households believe the inflation is almost
double the official figure.
businesses would be provided with easier access
to credit to expand.
Investment levels have declined in 2013, with
fixed capital investment down 6.3% in the third
quarter compared with the same quarter in 2012,
although this was an improvement from a decline
of 10.7% and 14.0% seen in the second and first
quarters of 2013 respectively.
Moscow and Abu Dhabi agreed on a joint
investment venture totaling $5 billion to develop
Russian roads, ports and bridges. Russia also
launched an investment strategy for civil aviation
with investment of $9 billion and over 100 sites
are currently undergoing reconstruction and
modernization in public and private partnership.
The private capital outflow from Russia increased
to almost $13 billion in the third quarter from $8
billion in the same period last year. The Ministry of
Finance remains optimistic and expects the outflow
to be $25 billion in 2014 and zero in 2015,
compared with $30 billion and $10 billion forecast
previously. Projections for 2016 have been revised
up to a capital inflow of $20 billion, compared
with zero previously.
Consumer Price Inflation
16%
14%
12%
10%
8%
6%
Fixed Capital Investment
4%
2%
0%
2013
2012
2011
2010
2009
50%
2008
12
40%
30%
20%
CPI Growth y/y %
Source: Federal State Statistics Service of Russia
Weak investment and heavy capital outflows
In an investment forum in October, Putin acknowledged
that Russia had to focus on new sources of economic
development. He said that infrastructure limitations
would be addressed and investment in the
communications sector would be increased. Measures
would also be taken to create more high paid jobs in
modern industries, while small and medium sized
10%
0%
-10%
-20%
-30%
-40%
2007
2008
2009
2010
2011
Fixed Capital Investment y/y %
Source: Federal State Statistics Service of Russia
2012
2013
13. MNI Russia Business Report - November 2013
Industrial production drops again
After a meagre rise in industrial production of 0.3%
on the year in September, it fell again in October by
0.2%, with manufacturing weakening sharply. Utilities
which had led the growth in industrial production in
September, slowed to 1.9% on the year compared
with 2.9% in September.
Industrial Production
15%
10%
5%
In August, Russia overtook Germany to become
Europe’s biggest car market but the weaker economy
has seen slowed the sales growth. New car sales fell
by 7.7% in October to 234,481 units according to
Association of European Businesses. This was the
eighth consecutive month of falling sales and from
January to October, sales of new cars fell by 6.7%
compared with the same period in 2012. The Russian
government has announced plans to allocate $3.3
billion in indirect subsidies for the country’s automotive
industry. These subsidies are designed to both develop
Russian car production and include support for
importing cars from the Far East, subsidisation of
interest rates on loans and compensation of banks’
expenses on preferential car loans.
0%
-5%
-10%
-15%
-20%
2008
2009
2010
2011
2012
2013
Industrial Production Annual Average
Trade Surplus Falls on the year
The trade surplus rose to $15.6 billion in September
from $13.8 billion in August, although down from the
surplus of $17.2 billion recorded in January. The
trade surplus for September was down by 0.2%
compared with the same period last year and in
August the trade surplus was 22.5% higher compared
with the same period in 2012, mostly due to base
effects.
Industrial Production y/y %
Source: Federal State Statistics Service of Russia
Mining and quarrying production grew in October by
1.8% from a year ago, slightly above the 1.7% growth
registered in September. The manufacturing sector
contracted for the sixth straight month, posting an
annual drop of 1.9%, significantly more than the
decline of 0.7% in September.
Stagnating industrial output has prompted industry to
call for a rate cut to boost growth. After growth of
2.7% in 2012, the government expects industrial
output to expand 2.0% in 2013, which looks optimistic
given the current gloomy economic scenario.
Retail Sales Recovered Slightly
Retail sales recovered slightly in October, increasing
by 3.5% on the year compared with 3% in the
previous month, but still below 4.0% seen in August.
Exports expanded 3.1% to $44.5 billion compared
with the same month a year earlier, the fourth
consecutive month of growth, according to the
Ministry of Economic Development. Imports rose
5.4% to $28.8 billion in September, following the
5.3% drop to $28.4 billion recorded in August.
13
14. 14
Spitzzeile Titel
Indicators
The depth of concern among Russia’s largest
companies was underlined by a fall in 11 of 15
future expectations indicators in November, with
seven of them hitting the lowest on record. For
current conditions, 13 out of 15 indicators fell.
15. MNI Russia Business Report - November 2013
51.5
MNI Russia Business Indicator
Future Expectations Lowest on
Record
The MNI Russia Business Indicator declined for the
second consecutive month in November following a
sharp rise in September, while expectations for the
future hit their lowest level since the series began in
March.
The headline Indicator stood at 51.5 in November,
8.5% down from 56.3 in the previous month, and
leaving it only just above the series low of 51.3
reported in August.
For current conditions, 13 out of 15 indicators fell in
November. Only the Effect of the Rouble Exchange
Rate and Availability of Credit indicators increased.
Business conditions worsened considerably in the
construction sector with the current conditions
indicator sliding into contraction, as signalled by a
downward trend of the future expectations indicator.
In contrast, companies in the manufacturing sector
reported an improvement in business conditions in
November, while optimism among service sector
companies fell, but remained above the breakeven 50
mark.
Weak third quarter GDP, which rose 1.2% on the year,
unchanged from the second quarter, has reinforced
concerns about Russia’s growth outlook. High
inflation, policy inaction and downgrades to official
growth forecasts have all hit business confidence.
MNI Russia Business Indicator
75
70
65
60
55
50
45
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
both service and manufacturing companies for which
the future expectations indicator fell into contraction.
Business expectations among construction sector
companies remained broadly unchanged following
September’s sudden drop below 50.
The depth of concern shared by Russia’s largest
companies was underlined by a fall in 11 out of 15
future expectations indicators, with seven of them
hitting the lowest on record in November. Only Export
Orders, Order Backlogs and Interest Rates Paid rose
between October and November.
Businesses believe conditions will continue to worsen
over the next three months, with the Expectations
Indicator falling to 45.0 in November, a new series
low, from 47.2 in October. The decline was led by
MNI Russia Business Indicator
May-13
Jun-13
Current Conditions
62.5
57.8
Future Expectations
59.5
57.5
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
51.8
51.3
59.0
56.3
51.5
59.0
61.5
55.0
47.2
45.0
15
16. 16
MNI Russia Business Report - November 2013
53.5
Production
Down Sharply in November
Production activity fell in November, led by a sharp
decline among construction companies, while
expectations for the future hit a new series low.
The Production Indicator fell to 53.5 in November
from 58.3 in October, a decline of 8.2% on the
month. Production bottomed out in August, moving
into contraction for the first time since the series
started in March. While it has subsequently recovered,
the latest fall puts it below the three month average of
56.6.
The decline in the Production Indicator in November
was led by a large fall in the construction sector,
which dropped into contraction. For manufacturing
firms the Production Indicator rose having remained
unchanged between September and October. For
service sector companies, the indicator fell compared
with the previous month, though remained above the
breakeven 50 mark.
Production
65
60
55
50
45
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
The Future Expectations Indicator plunged into
contraction in October, having remained broadly
stable around 58.0 until September. The indicator fell
further to 45.5 in November from 48.3 in October, as
firms were the gloomiest about production in three
months’ time since the series began in March.
Construction sector companies remained in
contraction for the third consecutive month and for
manufacturing and services sector companies, the
future expectations indicator fell below 50.
Production
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
61.0
Future Expectations
58.8
60.8
51.3
49.3
58.0
58.3
53.5
58.5
58.0
58.0
57.0
48.3
45.5
17. MNI Russia Business Report - November 2013
53.5
New Orders
Expectations Hit Record Low
Following a strong rise in September, the New Orders
Indicator has declined for the past two months,
dropping to 53.5 in November from 59.5 in October,
a 10.1% monthly fall.
In October, the construction sector was the strongest
in terms of New Orders, but it fell sharply into
contraction in November. Manufacturing remained
broadly stable, while the indicator for the service
sector fell slightly, although remained above the
breakeven 50 mark, and showed the strongest growth.
Firms’ Expectations for New Orders in three months’
time fell further into contraction and to the lowest
since the series began in March. The indicator stood
at 45.5 in November compared with 48.8 in October,
a decline of 6.8% on the month. Expectations for
New Orders were far below the series average of
56.8.
New Orders
80
70
60
50
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
The weakness was led by the service sector, for which
the indicator measuring firms‘ expectations for New
Orders moved into contraction. The New Orders
Indicator for the construction sector was unchanged
and remained in contraction, while the expectations
indicator for the manufacturing sector fell for the
second consecutive month, but remained above the
50 breakeven mark.
New Orders
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
73.8
63.3
Future Expectations
59.3
54.3
53.0
51.5
61.5
59.5
53.5
60.3
62.8
57.8
48.8
45.5
17
18. 18
MNI Russia Business Report - November 2013
48.7
Export Orders
Fall Back Below 50
After remaining in expansion territory for two months,
the Export Orders Indicator fell back into contraction
in November, while expectations for the future
remained well below the breakeven 50 level.
Export Orders
70
65
The Export Orders Indicator declined 6.5% in
November to 48.7, the lowest reading since August.
The indicator for manufacturing companies fell below
the 50 breakeven mark in October and remained in
contraction in November as well. The Export Orders
Indicator fell into contraction for the construction
sector, while service sector companies reported a
marginal decline, although remained above 50.
With concerns mounting over the outlook for both the
domestic economy and that of its trade partners,
companies’ expectations for the future remained
weak. Future Expectations improved marginally to
42.1 in November from 41.6 in October, the highest
reading since September. Expectations have trended
downwards since the series started in March, although
September was the first time the indicator moved
below 50.
60
55
50
45
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Exports Increased Since May
60
80%
50
60%
40%
40
20%
30
0%
20
-20%
10
-40%
0
-60%
2007
2008
2009
2010
2011
2012
2013
Exports FOB (billion USD)
Exports y/y % (RHS)
Source: Federal State Statistics Service of Russia
Export Orders
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
61.1
55.3
46.6
44.9
54.3
52.1
48.7
Future Expectations
57.9
57.3
52.1
53.0
43.3
41.6
42.1
19. MNI Russia Business Report - November 2013
50.8
Productive Capacity
Posts Small Decline
Productive Capacity ticked down in November as
more companies reported that, compared with a
month ago, their productive capacity was the same
rather than higher. Most companies also expected
productive capacity to remain unchanged in three
months‘ time.
The Productive Capacity Indicator stood at 50.8 in
November, compared with 51.8 in October and below
the three month average of 51.5. Both manufacturing
and service sector companies saw little change in
Productive Capacity, while the indicator fell to the
breakeven level for construction companies.
Productive Capacity has eased throughout most of
this year given the slowdown in the economy.
Investment levels have continued to decline in 2013
and the rate of capacity utilisation has trended lower,
dropping to 63% in October compared with 64% in
September and 65% at the start of the year.
Expectations for the next three months have been on
a downward trend seen the series started in March,
falling below the 50 breakeven level in September for
the first time. The indicator fell further into contraction
in November, declining to 48.5 from 48.7 in October,
below the three month average of 48.9.
Productive Capacity
65
60
55
50
45
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Productive Capacity and Rate of Capacity Utilisation
75
70
65
60
55
50
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
45
MNI Productive Capacity
Rate of Capacity Utilisation*
*Source: Federal State Statistics Service of Russia
Productive Capacity
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Current Conditions
57.3
Future Expectations
57.3
Oct-13
Nov-13
53.3
51.0
50.3
54.0
53.3
51.8
52.0
51.8
50.8
49.5
48.7
48.5
19
20. 20
MNI Russia Business Report - November 2013
47.4
Order Backlogs
Below 50 Again
Order Backlogs fell back into contraction in November
after rising above the breakeven level in October for
the first time since the series started in March.
Backlogs declined 5.8% on the month to 47.4 in
November, down from 50.3 in October. The indicator,
which measures the amount of unfilled orders at
companies, has mostly been in contraction since
March when the survey started, reflecting weak
demand and excess capacity in the economy.
Both construction and service sector companies’
Order Backlogs fell on the month, the former moving
into contraction again after last month’s rise to
expansion territory. The Indicator for manufacturing
sector companies remained in contraction.
Order Backlogs
55
50
45
40
35
30
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Companies remained pessimistic about the future, as
expectations for the next three months stayed beneath
the breakeven level. The Future Expectations Indicator
stood at 40.9 in November, compared with 40.4 in
October. Except for May, when the indicator rose
exactly to 50.0, expectations for Order Backlogs have
always been in contraction.
Order Backlogs
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Current Conditions
45.9
45.8
Future Expectations
50.0
49.7
Nov-13
45.9
47.1
49.2
50.3
47.4
49.7
49.2
43.8
40.4
40.9
21. MNI Russia Business Report - November 2013
47.7
Employment
First Time Under 50
The situation in the labour market worsened
considerably in November with an increased number
of companies reporting that they had too many
employees.
The Employment Indicator fell 7.0% to 47.7 in
November from 51.3 in October. While the majority of
companies continued to report that the number of
employees they currently had was “just right”, in
November more companies reported they had “too
many” employees compared with the previous month.
In spite of the weakening seen in the Russian
economy, official data showed that the unemployment
rate has been on a downward trend since the start of
the year, save for the latest data for October which
showed a rise to 5.5% from 5.3% in September. The
deterioration in the Employment Indicator in November
suggests we could see a further reversal of the
downward trend ahead.
Employment
60
55
50
45
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Unemployment Falls in the Third Quarter
10%
It could also be that government’s promise to relax
pressure on companies to keep workers on their
payrolls, is already starting to have an impact on the
labour market.
8%
6%
The Future Expectations Indicator remained
unchanged at 46.2 in November, the lowest since the
series began in March.
4%
2%
2007
2008
2009
2010
2011
2012
2013
Unemployment Rate
Source: Federal State Statistics Service of Russia
Employment
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
56.3
53.0
52.0
50.8
51.0
51.3
47.7
Future Expectations
51.8
51.8
51.5
50.8
47.5
46.2
46.2
21
22. 22
MNI Russia Business Report - November 2013
45.7
Inventories
Lowest on Record
The indicator measuring Inventories of Finished Goods
fell for the third consecutive month, leaving it at the
lowest level since the series started in March.
In November, the indicator fell 6.2% on the month to
45.7 from 48.7 in the previous month. The decline
was led by both manufacturing and construction
companies. For manufacturing companies, the
indicator contracted for the third consecutive month
and for construction companies, the indicator fell after
remaining stable in previous months.
The Indicator had remained steady since March,
hovering very close to the 50 breakeven level, but
since August it has declined steadily. With demand
weak and firms expecting growth to remain subdued
for the foreseeable future, it is not surprising to see
companies running down stock levels.
Inventories
55
50
45
40
35
30
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Expectations for three months’ time fell to 42.6 in
November from 51.3 on October, the lowest since
March, indicating more companies expect to reduce
their stock levels in three months‘ time.
Inventories
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
50.8
50.6
50.0
50.0
49.4
48.7
45.7
Future Expectations
47.7
46.3
47.5
47.4
51.9
51.3
42.6
23. MNI Russia Business Report - November 2013
53.4
Input Prices
Expectations Hit a New Record
Low
Input Prices eased for the second consecutive month
in November and expectations for the future fell to the
lowest level since the series began in March.
The Input Prices Indicator declined by 1.5% in
November to 53.4, compared with 54.2 in October,
the lowest since August. The fall was mainly led by
construction companies which have seen lower input
prices in the past two months. The indicator increased
slightly for manufacturing firms, while for service
sector firms, it remained unchanged compared with
the previous month.
Oil prices have fallen from over $117 per barrel in
September to just under $107 on November 13.
Input Prices
80
70
60
50
40
30
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Expectations for three months’ time have been on a
declining trend since the start of the series in March.
The Expectations Indicator remained broadly
unchanged in November at 51.0, compared with 51.3
in October, a new series low.
Future Expectations
Input Prices
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
68.8
63.1
55.2
50.5
55.8
54.2
53.4
Future Expectations
59.4
58.9
55.5
56.6
55.3
51.3
51.0
23
24. 24
MNI Russia Business Report - November 2013
53.5
Prices Received
Down Significantly
The Prices Received Indicator decreased to 53.5 in
November from 58.5 in October, the lowest since
July, likely reflecting the recent decline in Input Prices.
The latest fall was led by construction sector
companies where the indicator fell to the breakeven
level following strong growth in October. The indicator
for manufacturing and service sector companies also
fell, but remained above 50.
Expectations for Prices Received in three months’
time fell in November to the breakeven 50 mark, the
lowest since the series started in March.
Consumer price inflation increased to 6.3% in October
after slowing to 6.1% in September. According to first
deputy chief of the central bank, Ksenia Yudayeva,
inflation expectations remain high.
Prices Received
70
60
50
40
30
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Prices Received
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
67.3
Future Expectations
54.5
61.3
51.0
54.0
58.3
58.5
53.5
55.8
55.1
54.6
55.3
50.3
50.0
25. MNI Russia Business Report - November 2013
58.6
Financial Position
Current and Future Conditions
Worsen
The Indicator measuring the Financial Position of
companies fell in November, led by a significant
decline among construction companies.
The Financial Position Indicator stood at 58.6 in
November, compared with 61.9 in October, a drop of
5.3% on the month.
Construction companies reported a marked fall in
their financial positions in October, offsetting the gain
in the previous month. Manufacturing and service
sector companies reported that their financial positions
were broadly stable in November compared with the
previous month.
Expectations for three months’ time fell by almost
6.0% to 56.2 in November from 59.7 in October, the
second
consecutive
monthly
decline.
Both
manufacturing and service sector companies expected
to see a decline in their financial positions in the next
three months after a pick-up in optimism in September.
Financial Position
80
70
60
50
40
30
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Financial Position
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
68.0
Future Expectations
56.0
64.9
51.8
53.6
61.4
61.9
58.6
55.4
58.3
65.8
66.9
59.7
56.2
25
26. 26
MNI Russia Business Report - November 2013
50.5
Interest Rates Paid
Trending Down
The indicator on Interest Rates Paid had been on a
downward trend since the start of the survey in March
and fell to the lowest level on record in November.
Interest Rates Paid fell to 50.5 in November having
stood at 50.8 in both September and October. The
indicator peaked in April this year at 57.4 and the
November reading was below the series average of
53.4.
Almost all respondents said that the interest rates
paid on their borrowings were the same in November.
For the next three months, they did not expect
borrowing costs to change either. For the manufacturing
sector, the indicator fell to the breakeven mark and for
construction and services it remained stable at just
above 50.
Interest Rates Paid
59
57
55
53
51
49
47
45
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
The yield on the Russian 10-year government bond
has fallen from 7.41% last year to stand at 7.16% on
November 19, while three month interwwbank rates
have fallen from 7.18% to 6.81% over the same
period.
Expectations for the next three months increased
slightly to 50.6 in November from 50.0 in October,
the highest since July and the first monthly rise since
April. Russia’s central bank has maintained that it will
only cut the key interest rate when inflation
expectations ease. The current level of consumer
price inflation rose to 6.3% in October, above the
5.0%-6.0% target range.
Interest Rates Paid
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
54.1
55.8
52.5
52.8
50.8
50.8
50.5
Future Expectations
52.2
51.9
51.7
50.3
50.3
50.0
50.6
27. MNI Russia Business Report - November 2013
54.1
Effect of Rouble Exchange Rate
Positive Effect on Businesses
The Effect of the Rouble Exchange Rate Indicator rose
to a new high of 54.1 in November from 53.4 in
October, showing that more companies believe the
exchange rate is helping business.
Businesses are asked whether the exchange rate is
helping or hurting their company and a value above
50 shows more firms reported that it was helping,
while a reading below 50 shows the exchange rate
was hurting business.
Over the past year, the rouble has fallen around 3.6%
against the US dollar, although the decision in
September by the US Federal Reserve to postpone
tapering Quantitative Easing has prompted a rebound
in the currency.
Effect of Rouble Exchange Rate
55
53
51
49
47
45
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Compared with some other emerging markets, the risk
to the currency from any policy change in the US
looks limited given Russia’s large current account
surplus, low fiscal deficit and little reliance on foreign
direct investment. Slow economic growth, however,
coupled with a lack of investment potential puts
pressure on the attractiveness of the currency.
After remaining unchanged between September and
October, the expectation for the next three months fell
slightly to 50.0 in November, the lowest since August.
RUB Depreciates Against USD
38
36
34
32
30
28
26
24
22
20
2007
2008
2009
2010
2011
2012
2013
RUB against USD
Source: The Central Bank of the Russian Federation
Effect of Rouble Exchange Rate
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
50.9
50.6
49.7
Future Expectations
49.7
48.2
49.1
49.4
51.0
53.4
54.1
49.3
50.7
50.7
50.0
27
28. 28
MNI Russia Business Report - November 2013
49.7
Supplier Delivery Times
Down for Second Consecutive
Month
The time taken to deliver supplies to companies fell in
November, having lengthened for the past two
months.
Supplier Delivery Times
55
The Supplier Delivery Times Indicator shortened by
1.2% to 49.7 in November from 50.3 in October.
Manufacturing sector companies reported shorter
delivery times, slipping below the 50 breakeven level.
In contrast construction companies have reported a
lengthening of delivery times in recent months.
53
The slowdown in Delivery Times was in line with the
decline in New Orders in October and November.
43
Expectations for Supplier Delivery Times in three
months’ time shortened to 49.2 in November, having
remained unchanged at 49.5 in October. The
expectations indicator has remained broadly stable
since March with the series averaging 49.6, and only
rising above the breakeven level of 50 twice since
then.
51
49
47
45
41
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
Future Expectations
Supplier Delivery Times
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Current Conditions
51.5
48.0
45.9
Future Expectations
49.7
49.5
49.2
46.4
51.0
50.3
49.7
50.3
49.5
49.5
49.2
29. MNI Russia Business Report - November 2013
58.0
Availability of Credit
New Record High
Credit conditions for firms improved for the third
consecutive month in November, rising 5.6% on the
month to 58.0 from 54.9 in October.
The Availability of Credit Indicator moved from
contraction to expansion in May and has subsequently
remained above the 50 breakeven mark.
Companies in the manufacturing sector continued to
show an improvement in credit conditions, while for
construction sector firms the indicator fell to the
breakeven level, having remained stable for the last
three months. Service sector companies also showed
an increased availability of credit, following a decline
in the previous month.
Availability of Credit
60
55
50
45
40
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Current Conditions
The Future Expectations Indicator declined by 2.6%
to 52.0 in November from 53.4 in October, and below
the series average of 53.3.
Future Expectations
Availability of Credit
May-13
Jun-13
Current Conditions
51.7
54.4
Future Expectations
52.5
52.2
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
51.9
51.1
54.7
54.9
58.0
52.7
53.1
54.9
53.4
52.0
29
32. 32
MNI Russia Business Report - November 2013
Historical Records
Minimum
Maximum
Median
Mean
Current Conditions
51.3
62.9
56.9
57.8
Future Expectations
45.0
71.3
57.8
59.0
MNI Russia Business Indicator
Production
Current Conditions
49.3
61.1
56.4
58.0
Future Expectations
45.5
58.8
55.3
57.4
Current Conditions
51.5
73.8
60.1
61.5
Future Expectations
45.5
62.8
56.8
59.3
Current Conditions
44.9
61.1
53.7
54.3
Future Expectations
41.6
66.0
52.6
53.0
New Orders
Export Orders
Productive Capacity
Current Conditions
50.3
57.7
53.2
52.0
Future Expectations
48.5
63.2
53.8
53.3
Current Conditions
39.6
50.3
46.2
45.9
Future Expectations
37.7
50.0
45.2
45.0
Order Backlogs
Employment
Current Conditions
47.7
56.5
52.7
52.0
Future Expectations
46.2
53.6
50.1
51.5
Current Conditions
45.7
50.8
49.5
50.0
Future Expectations
37.5
51.9
46.7
47.5
Current Conditions
50.5
68.8
55.9
54.2
Future Expectations
51.0
67.9
57.1
56.6
Inventories
Input Prices
Prices Received
Current Conditions
46.3
67.3
55.6
54.0
Future Expectations
50.0
55.8
53.4
54.5
Current Conditions
51.8
68.0
60.3
61.4
Future Expectations
55.4
68.5
60.5
58.3
Current Conditions
50.5
57.4
53.4
52.8
Future Expectations
50.0
54.5
51.7
51.7
Current Conditions
49.4
54.1
51.1
50.6
Future Expectations
48.2
50.7
49.6
49.7
Current Conditions
45.9
51.5
48.8
49.7
Future Expectations
49.1
50.8
49.6
49.5
Current Conditions
48.1
58.0
52.6
51.9
Future Expectations
52.0
55.6
53.3
53.1
Financial Position
Interest Rates Paid
Effect of Rouble Exchange Rate
Supplier Delivery Time
Availability of Credit
33. 33
MNI Russia Business Report - November 2013
Historical Records - Quarterly
Q2 13
Q3 13
Quarterly Change
Quarterly % Change
Current Conditions
61.1
54.0
-7.1
-11.6%
Future Expectations
60.4
58.5
-1.9
-3.1%
Current Conditions
58.7
52.9
-5.8
-9.9%
Future Expectations
57.8
57.7
-0.1
-0.2%
Current Conditions
66.4
55.3
-11.1
-16.7%
Future Expectations
58.7
60.3
1.6
2.7%
Current Conditions
59.0
48.6
-10.4
-17.6%
Future Expectations
58.4
49.5
-8.9
-15.2%
Current Conditions
56.1
51.1
-5.0
-8.9%
Future Expectations
56.3
51.5
-4.8
-8.5%
Current Conditions
45.3
47.4
2.1
4.6%
Future Expectations
48.2
47.6
-0.6
-1.2%
Current Conditions
55.1
51.3
-3.8
-6.9%
Future Expectations
52.4
49.9
-2.5
-4.8%
Current Conditions
50.5
49.8
-0.7
-1.4%
Future Expectations
47.4
48.9
1.5
3.2%
Current Conditions
61.1
53.8
-7.3
-11.9%
Future Expectations
58.8
55.8
-3.0
-5.1%
Current Conditions
59.7
54.4
-5.3
-8.9%
Future Expectations
54.2
55.0
0.8
1.5%
Current Conditions
63.9
55.6
-8.3
-13.0%
Future Expectations
56.4
63.7
7.3
12.9%
Current Conditions
55.8
52.0
-3.8
-6.8%
Future Expectations
52.9
50.8
-2.1
-4.0%
Current Conditions
50.6
50.0
-0.6
-1.2%
Future Expectations
49.3
49.7
0.4
0.8%
Current Conditions
49.8
47.8
-2.0
-4.0%
Future Expectations
50.0
49.7
-0.3
-0.6%
Current Conditions
51.5
52.6
1.1
2.1%
Future Expectations
52.7
53.6
0.9
1.7%
MNI Russia Business Indicator
Production
New Orders
Export Orders
Productive Capacity
Order Backlogs
Employment
Inventories
Input Prices
Prices Received
Financial Position
Interest Rates Paid
Effect of Rouble Exchange Rate
Supplier Delivery Time
Availability of Credit
34. 34
MNI Russia Business Report - November 2013
Methodology
MNI Russia Business Sentiment is a monthly poll of
Russian business executives at companies listed on
the Moscow Exchange. Companies are a mix of
manufacturing, service, construction and agricultural
firms.
Respondents are asked their opinion on whether a
particular business activity has increased, decreased
or remained the same compared with the previous
month as well as their expectations for three months
ahead, e.g. Is Production Higher/Same/Lower
compared with a month ago?
A diffusion indicator is then calculated by adding the
percentage share of positive responses to half the
percentage of those respondents reporting no change.
An indicator reading above 50 shows expansion,
below 50 indicates contraction and a result of 50
means no change.
Data is collected through computer aided telephone
interviews and around 200 companies are surveyed
each month.
35. Discovering trends in BRIC
countries: MNI BRIC indicators
MNI‘s new BRIC indicators explore attitudes, perspectives and confidence in
Brazil, Russia, India and China. Our data and monthly reports present an advance
picture of the economic landscape as perceived by businesses and consumers.
Our indicators allow investors, economists, analysts, and companies to identify
economic trends and make informed investment and business decisions. Our data
moves markets.
www.mni-indicators.com
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