A SUPPLEMENT TO EUROMONEY/SEPTEMBER 1997
RUSSIA: THE NEXT CHAPTER
Colossus on the road to market
The old guard remains in control at Gazprom, Russia's dominant gas producer. But can they fend off plans to liberalize the gas sector?
French row blocks Goldman's gas loan
If an international bank wants to increase its profile in Russia, it heads straight for Gazprom. Russia's largest company has huge capital requirements for the next few years, and to be seen working on as many of its deals as possible is the best way to market services to other Russian companies.
Muscovites learn to love Luzhkov-onomics
Regional governments are taking back control of local businesses in the name of saving jobs and preventing foreign speculators from taking over. While some observers regard this as an undesirable move, things could be worse. Renationalization, the bogey which haunted Russia's first few years of market reform, has melted away as the Kremlin moves to sell whatever mineral fortunes it has left. But relocalization is just gathering steam.
The Russian $90 billion promissory note market is the largest debt market in the country. But major reforms are required for it to mature into a mainstream corporate bond market - and yields must remain high or foreign investors will not be willing to take the extra risk.