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- Press review: Putin-Biden summit focuses on Ukraine and UK eyes AUKUS-like axis for Arctic
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- Press review: Russia, India to deepen ties and NATO spying endangers civilian airliners
- Press review: Why Russia nabbed Ukrainian spy ring and Transnistria up against the wall
Top stories from the Russian press on Tuesday, November 23rd, prepared by TASS
Vedomosti: What caused the Russian market’s fall and what will happen to the ruble
On Monday, November 22, the Russian market plunged to a new low for the first time in several months. Investors massively sold off assets: the Moscow Exchange index closed with a 3.58% decrease and for the first time since August sinking below 3,880 points, despite exceeding 4,000 points last week. The RTS index plummeted even further by 5.5% to 1,628 points. The dollar exchange rate on the evening of November 22, broke through the 75 ruble mark (+1.5 rubles), the last time the greenback traded above this mark was in July. Since the end of October, when the dollar was worth 70.9 rubles, the Russian currency has depreciated by 5.8% against the US currency. The euro reached 84 rubles for the first time since the beginning of October, and during the day traded at 84.4 rubles. (+1.4 rubles) It went up in price against the ruble since the beginning of the month by 3%. By 20:20 Moscow time, one dollar cost 74.8 rubles, and 1 euro was worth 84.2 rubles.
During the evening trading session, among blue chip stocks, Yandex securities plunged the most. By 20:20 Moscow time, they sank 10%, surpassing the depth of the fall of TCS Group, whose depositary receipts fell by more than 7% on the Moscow Exchange. On the London Stock Exchange, TCS shares plummeted even lower by 8.5% to $88.30 per share. The worst performers by Monday evening were Sberbank shares (6%), Polyus (5.83%) and Gazprom’s shares (5.28%). The commodity market also fell. January Brent oil futures on the London ICE exchange declined 0.09% to $78.82 per barrel. Oil has already decreased in price by 9% from the local maximum reached on October 26 ($86.4 per barrel).
Experts told Vedomosti that there are many reasons for the Russian market’s downturn: worsening geopolitical risks, another global wave of COVID-19, falling oil prices, the expectation of an imminent tightening of monetary policy by the US Federal Reserve and the situation with Rusnano bonds.
The greenback is supported by increased investor demand for defensive assets due to the worsening epidemiological situation in Europe and the expectation of a tightening of the Fed’s monetary policy to curb inflation (it reached a record 6.2% since the 1990s), says Mikhail Vasilyev, chief analyst at Sovcombank. Since mid-November, the US central bank began to reduce the volume of providing cheap dollar liquidity by $15 billion a month.
The increase in the incidence of coronavirus infection in Europe and the risk of lockdowns in relation to Russian assets are intensified by the escalation of geopolitical risks and lower oil prices, Stanislav Kleschev, investment strategist at VTB My Investments told Vedomosti.
Kommersant: Minsk in talks with EU on practical aspects of conflict, but feud still fierce
Belarus and the EU began their first practical attempts to de-escalate the situation on the Belarusian-Polish border. Minsk, which has not received any high-ranking guests from Brussels for a long time, hosted a group of experts from the European Commission on Monday, November 22.
The EU’s key task is to agree on the repatriation of migrants "stuck in Belarus". At the same time, there is no need to talk about political de-escalation. While the President Alexander Lukashenko of Belarus warned Polish politicians about the consequences of possibly closing the border, the EU announced its response to the practice of politically weaponizing the migrants. There was also a threat to file a lawsuit against the Belarusian leadership in the International Court of Justice in The Hague.
Last week, Angela Merkel called Lukashenko twice, agreeing to bring the problem to the Belarusian-European level and immediately enter into negotiations. As Lead Spokesperson for EU External Affairs Peter Stano pointed out, the head of EU diplomacy, Josep Borrell, also spoke twice (November 14 and 16) with Belarusian Foreign Minister Vladimir Makei. He said that work on the issue was in progress at different levels.
At the same time, Austrian Chancellor Alexander Schallenberg made a number of critical remarks about the Belarusian authorities. On Monday, he took part in an international conference on Belarus initiated by Vienna, which was joined by a number of his European colleagues and Belarusian opposition figurehead Svetlana Tikhanovskaya (representatives of the Belarusian and Russian authorities were also invited, but did not participate in the event). Schallenberg called on the EU not to succumb to Lukashenko’s blackmail and doubted the effectiveness of the direct dialogue, although he admitted that it was necessary to interact with Minsk. He also welcomed EU sanctions against Belarus and promised that "the perpetrators of this grave human rights violations" in the country would be punished.
Izvestia: US eyes sending military advisors, weapons to Ukraine
The Biden administration is considering an option in which Washington would send military advisers to Ukraine, as well as new equipment, including weapons, CNN reported, citing its own internal sources, Izvestia writes.
The decision may be made due to the US fears that have to do with Russia. The American media is spreading information about an allegedly impending invasion of Ukraine by Russian forces. It was alleged that Moscow had called up tens of thousands of reservists, on a scale unprecedented in post-Soviet times. According to the TV channel, the aid package will be presented against the background of statements from Kiev, which continues to talk about the alleged preparation of an invasion in January 2022. Presumably, together with the advisers, mortars and Javelin ATGMs might be headed to Ukraine. In addition, reports state that the Pentagon may transfer to Ukraine some of the weapons that Washington had planned to provide to the Afghan authorities before the fall of the government in the summer of 2021. Helicopters are also under consideration.
Russia’s State Duma said that the purpose of this fake news is to explain to the world community why US and NATO military bases operate in Ukraine. MP Viktor Vodolatsky told Izvestia that even the Ukrainian Armed Forces officers say that there is no concentration of the Russian military. There are simply troops stationed in these regions.
Kommersant: US, West up in arms over China’s mounting military might
The United States and its allies in the East are seriously concerned about China's growing military activities.
Beijing’s recent tests of a hypersonic missile (which it denies), as well as the flyover of Russia’s strategic aviation and Chinese long-range aviation above the waters of the Sea of Japan and the East China Sea were particularly significant events. Despite the explanation by the Russian Ministry of Defense that these flights are not directed against any third countries, the United States, together with its allies, regard them as a threat.
A new discussion about how to contain Beijing’s military power, which allegedly achieved a breakthrough in the creation of hypersonic weapons, was caused by a publication in the London-based newspaper, the Financial Times. Citing the Pentagon's Defense Advanced Research Projects Agency (DARPA), the newspaper provides new estimates of China's July 27 test over the South China Sea.
"From the previous format to a non-binding "strategic partnership", Russia and China, under pressure from the West, are moving towards a new stage of cooperation - a de facto military alliance, which, however, has not yet received international legal formalization," Senior Research Fellow of the USA and Canada Institute Vladimir Batyuk told Kommersant. According to him, the evolution of military cooperation between Moscow and Beijing was predetermined by two key factors - purposeful efforts to bring NATO infrastructure closer to Russia's western border and building an anti-Chinese cordon sanitaire on the southern and eastern borders of China. "Just this year, the United States and its allies have sharply intensified military maneuvers and military presence in the Black and Baltic Seas, while embarking on creating infrastructure for the deployment of ground-based medium-range missiles in Europe. What’s more, they formed the anti-Chinese military-political alliance AUKUS," he said. It is not surprising that the joint Russian-Chinese exercises have reached a qualitatively higher level. If earlier, in the course of these sorts of events, their "anti-terrorist" or "anti-piracy" character was emphasized in every possible way, now a different, more complex task is at hand." According to Batyuk, "Moscow and Beijing are demonstrating their readiness for joint actions against a great hostile power or a coalition of hostile powers."
Vedomosti: Steel rolled products from Donbass republics can occupy 15% of the Russian market
The Alchevsk Iron and Steel Works, located on the territory of the unrecognized Lugansk People's Republic (LPR), resumed the operations of its heavy-plate rolling shop on November 21, according to the Lugansk Information Center with reference to a representative of the plant. The company said that heavy-plate products "are in certain demand" in the Russian market and the shop resumed production in connection with the release of the recent decree by Russian President Vladimir Putin (on simplifying the access of goods from the Donetsk and Lugansk People's Republics to the Russian market). The company representative pointed to "the possibility of concluding contracts and selling this product on the Russian territory."
By the end of November, the plant plans to produce over 10,000 tonnes of rolled products. In December, production is planned to ramped up to 40,000-45,000 tonnes of rolled products per month with the prospect of further growth. As the leaders of the DPR and LPR, Denis Pushilin and Leonid Pasechnik, stated in June 2021, the enterprise, like other metallurgical assets of the republics, is now under the control of a "new investor". It is Southern Mining and Metallurgical Complex owned by the Russian entrepreneur Yevgeny Yurchenko, who could not be reached for comment. Prior to that, the metallurgy of Donbass was owned by the Vneshtorgservis CJSC registered in South Ossetia. The company was run by Ukrainian entrepreneur Sergei Kurchenko.
The main consumers of heavy plate steel are the shipbuilding industry and mechanical engineering, so it can be assumed that rolled products from Alchevsk will be consumed in Russia, says Sergei Grishunin, the managing director of the NRA's rating service. The issue of deliveries to Russia is still seen as completely politicized, says Oksana Lukicheva, an analyst on Otkritie Investments commodity markets. She notes that the steel market in Russia is excessive, half of the production is exported, and the domestic market depends on export parity. The thick-plate rolled steel produced by Alchevsk is not a unique product for the Russian market, so Alchevsk will have to compete with all of Russia’s largest steel producers, which the latter are unlikely to be happy about, Lukicheva believes. Steel supplies from Alchevsk will be successful if the products are made to order or have additional properties, she said.