Russia and Ukraine

Putin gets a strong but pliant central bank governor in Elvira Nabiullina. She might please other constituents too.

Once seasonal rouble demand for tax payments has passed later this month, the currency should suffer, given Russia’s close links to Cyprus.

The ramifications of selling contingent convertible bonds (CoCos) to retail buyers could be brutally illustrated by the bailout of Cyprus’s banking sector, while ties with Russia complicate strategy.

Rosneft signs second tranche; Maroc Telecom next

First Eurolira deals; Eurorouble bonds in vogue

The Russian government’s desire to build an international financial centre in Moscow is genuine. However, the government’s market infrastructure reforms are also driven by other short-term and long-term motivations. Short-term concerns centre on a reluctance to lose out to rival markets in central and eastern Europe. “Other CEE countries are competing hard for foreign investment and investors,” says Alex Krunic, head of product sales for direct custody and clearing at JPMorgan. “Poland clearly has positive momentum: it is number one for IPOs in Europe in 2012, number four by value of IPOs and number nine by cash equity value.”

There are good strategic reasons for Sberbank to be concerned about the growth of such operations as Tinkoff and Home Credit: and good reason for a counter-attack. Tinkoff, Home Credit and Russian Standard are all at their strongest outside the main cities: regions where Sberbank, as the former state savings bank, has in some cases had almost a monopoly.

A central securities depository, liberalization of the local bond market, movement to T+2 settlement and a stock exchange merger – it’s all very welcome in Russia’s capital markets. But work remains to be done if its infrastructure is to catch up with its peers.

A trio of successful listings out of emerging Europe has boosted bankers’ hopes of an equity primary markets renaissance in 2013, with prospects for further supply from Russia, Turkey and beyond.

Oleg Tinkov is at the forefront of the consumer-banking boom that is changing Russian finance. Tinkoff Credit Systems encapsulates all that is innovative – and risky – about the sector. This bank and others like it have everything the state banks lack. But in Russia that can mean trouble.

Russia must employ careful persistence in its movement towards a floating exchange rate.

$45 billion cash for TNK BP; Bond markets wait for more