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Abramovich Investment Helps Internet Company Yandex Go It Alone – Yahoo Canada Finance

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Abramovich Investment Helps Internet Company Yandex Go It Alone

(Bloomberg) — Roman Abramovich is taking a stake in Russia’s largest internet company, Yandex NV, giving it more firepower to buy out ecommerce partner Sberbank PJSC and accelerate a push into online retail.

The billionaire owner of Chelsea Football Club and two partners — VTB Bank PJSC and a company owned by steelmaking billionaires Alexander Abramov and Alexander Frolov — are buying into Yandex as part of an $800 million share sale to fund growth and strategic projects, it said in a statement late Tuesday.

Yandex also announced it will spend $570 million to end the ecommerce and online payments venture with Sberbank, Russia’s largest lender.

The move signals a change of tack by Yandex founder Arkady Volozh, who until now used joint ventures to share the burden of heavy startup investments in ecommerce and ride-hailing and may now feel confident enough to go it alone.

Yandex is also weighing whether to buy out Uber Technologies Inc. from their Russian ride-hailing venture, two people familiar with the matter told Bloomberg this month. A Yandex spokesman said at the time that the company is reviewing options for restructuring ownership of its joint ventures.

Kirill Panarin, a Moscow-based analyst at Renaissance Capital, said Yandex had over $2.5 billion in cash on its balance sheet as of March 31, which would have been enough to buy out Sberbank without the need for fresh funds.

“Raising funds from the market means Yandex may have more deals to follow, like buying out Uber from their ride-hailing and foodtech JV,” Panarin said by phone.

The Sberbank venture hasn’t been an easy one for Volozh, who’s had a tense relationship with the bank’s Chief Executive Officer Herman Gref. Last year, Gref announced a partnership with Yandex’s rival Mail.ru Group Ltd. to develop ride hailing and food delivery.

Read More: Yandex, Sberbank Look at Splitting E-Commerce, Fintech Projects

“Given the great potential for further growth of e-commerce in Russia, we believe now is the right time for us to fully consolidate operating control over Yandex.Market and accelerate our e-commerce strategy,” Yandex Chief Financial Officer Greg Abovsky said in the statement on the Sberbank buyout.

Record High

Under the two-pronged deal, Yandex will buy Sberbank’s 45% stake in ecommerce company Yandex.Market for 42 billion rubles ($610 million) and sell to Sberbank its remaining 25% holding in online-payments business Yandex.Money for 2.4 billion rubles.

Sberbank had invested 30 billion rubles in Yandex.Market in 2018, giving Yandex more resources to transform its price-comparison site into an online marketplace. The partners launched ecommerce platform Beru which entered the top-12 of Russian online retailers last year, according to researcher Data Insight, and reached monthly sales of 4 billion rubles.

Under the terms of the share placement, Yandex will sell stock representing 5% of the company, raising $200 million via an accelerated bookbuild and selling a further $600 million of shares to the three private investors including Abramovich in equal proportions.

The share placement is well timed as Yandex shares reached a record high on Tuesday, taking its market value above $16 billion, after President Vladimir Putin agreed to give unprecedented tax breaks to information technology companies, BCS Global Markets said in a note.

Bringing in Abramovich and the two co-founders of steelmaker Evraaz Plc “could raise some eyebrows,” said BCS, but a two-year lockup for them to sell shares and a clause that forbids any of the three investors from acquiring more than 3.99% of the stock “may provide some comfort.”

The new funds boost Yandex’s finances just as it grapples with the coronavirus pandemic, which contributed to a 41% fall in its earnings before interest, taxes, depreciation and amortization in the second-quarter.

(Adds analyst comment from sixth paragraph)

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Community and Business Leaders Call for Federal Investment in Offshore – Canada NewsWire

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ST. JOHN’S, NL, July 7, 2020 /CNW/ – Today, community and business leaders, as well as supporters throughout Canada, are united to send a clear message to the Government of Canada that action is needed to attract investment in the offshore oil and gas industry and help thousands of Canadians get back to work. Over 80 leaders have spoken out today about what the offshore means to them and their organizations. Read their comments here.

Over the next 10 years, the estimated loss to the province due to deferment and loss of oil and gas exploration and development projects could be substantial:

  • $11 billion in provincial revenues impacting programs, infrastructure, education and health care throughout communities in Newfoundland and Labrador;
  • $59 billion of total provincial GDP;
  • 90,000 person-years of employment, resulting in significantly lower consumer spending in retail, restaurants, real estate, and other services; and
  • The province’s best opportunity to be an international clean growth leader and oceans technology hub.

The world is moving towards a low carbon economy. Newfoundland and Labrador’s offshore oil and gas industry represents one of the lowest carbon per barrel footprints in the world. Greenhouse gas emissions can be further reduced by making immediate investments in the development of lower carbon fossil fuels. Reducing global emissions by providing the world with Newfoundland and Labrador oil to help supply increasing global energy demand is a valuable contribution to the fight against climate change.

Newfoundland and Labrador’s offshore oil and gas industry fully supports protecting the environment, reducing carbon emissions and working with governments to meet provincial, national, and international emissions reduction targets. Through its commitment to lower carbon and clean technology, the offshore oil and gas industry will be a catalyst for clean growth innovation. The technologies developed will also accelerate the diversification of the province’s economy. The Newfoundland and Labrador approach mirrors that of Norway, a global environmental leader, which has steadily increased oil and gas production since 2012 due to its government’s policy of stimulating exploration and development while simultaneously taking significant actions to move to a low carbon economy and developing new clean technologies that are being exported worldwide. Newfoundland and Labrador can lead Canada’s energy future and make Canada a global clean growth leader like Norway.

The importance of the oil industry to the economy of Newfoundland and Labrador cannot be overstated with an estimated 30 per cent of GDP, 13 per cent of labour compensation and 10 per cent of employment (over the 2010 to 2017 period). As of March 31, 2020 there were 6,390 people directly employed on NL offshore oil and gas development projects while thousands more were employed in supporting industries.

All Canadians are encouraged to join with the over 80 leaders who are today calling for support for the offshore. Learn more at www.weareNLoffshore.ca/supportNL.

SOURCE Canadian Association of Petroleum Producers

For further information: Ken Morrissey, Senior Advisor Communications, Research and Policy, Noia, M: 709-725-5172, E: [email protected]; Jill Piccott, Advisor, Communications and Policy, Canadian Association of Petroleum Producers, M: 709-685-4812, E: [email protected]

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Virus crisis exposes tensions over tighter controls for investment funds – The Journal Pioneer

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By Huw Jones

LONDON (Reuters) – Britain’s market watchdog is resisting calls for stricter rules on investment funds, putting the regulator at odds with the Bank of England which wants tighter controls to prevent them becoming a source of contagion in financial markets.

The BoE has said these funds may need stronger controls after the turmoil triggered by the coronavirus pandemic exposed their potential threat to financial stability because unlike banks they do not hold reserves of capital.

Britain’s commercial property funds, for example, had to stop investors asking for their money back on a daily basis when extreme market volatility hit in March after economies entered lockdown.

Money market funds, a key source of short-term funding for companies, could have become a source of “contagion” during a COVID “dash for cash” had central banks not eased a liquidity crunch, the Bank of England said last month.

“How do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs, without having to commit scarce public money to costly support facilities?” the BoE said.

But Britain’s Financial Conduct Authority does not want to rush to impose tighter rules because investment funds can be an important source of cash for companies coping with the crisis.

“We are still very much in the context of a continuing health crisis,” Nausicaa Delfas, head of international at Britain’s Financial Conduct Authority (FCA), told Reuters.

“It’s important that we recognise that the non-bank sector is critical in enabling recapitalisation of companies to promote growth and recovery from the pandemic,” Delfas said.

“This is definitely looking to the medium and longer term.”

She said global and UK regulators are studying how the financial system operated during the early months of the crisis to see how banks, market infrastructure as well as non-banks functioned collectively under extreme stress.

The tension between central banks and securities watchdogs over regulating funds is not new, having surfaced in 2015 when the International Organization of Securities Commissions (IOSCO) torpedoed an attempt by the Financial Stability Board (FSB) to impose bank-like rules on big asset managers.

“The discussion has calmed down quite a lot since then and there is a recognition of the need to be fully informed,” a financial market source said.

The FSB referred to an April statement which said that while the pandemic has highlighted potential vulnerabilities in non-banks, it was important to reap the benefits of the dynamic sector and apply existing recommendations.

The FSB will update on its thinking next week.

The BoE noted in a Financial Policy Committee statement in May that “underlying issues need to be addressed once the immediate problems have passed.” The Bank has said it was in “close contact” with other authorities outside Britain.

An update on funds is expected on August 6 from the BoE.

But a senior funds industry official said Brexit and lack of global consensus on what should be done, leaves Britain with only limited room to reform a cross-border sector on its own beyond making a “noise.”

LOCAL PROBLEM?

Some regulators have noted there has been no global run on funds to indicate a systemic problem, one financial market source said.

March market volatility pointed to problems in the commercial paper market – used for short-term financing – rather than with the money market funds themselves, the source added.

This source said that about 95% of fund assets suspended globally in the pandemic were in UK property funds and that was because of an inability to value assets in extreme conditions.

Before the crisis, the shuttering of a flagship UK open-ended equity fund run by then star stockpicker Neil Woodford had created a sense urgency in Britain for fund industry reform.

But fundamental reform of money market and other open-ended funds like Woodford’s will be tough for Britain because 8,317 of 10,930 of those sold in the country come under European Union law, which Britain can no longer influence since Brexit.

And Britain’s finance ministry has said that there are no viable UK alternatives to EU money market funds in the short or medium term.

“Any action on sterling money market funds in the UK will likely be in the form of additional requirements on EU money market funds being sold in the UK,” said Sean Tuffy, head of market and regulatory intelligence at Citi Securities Services.

(Reporting by Huw Jones. Editing by Jane Merriman)

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Virus crisis exposes tensions over tighter controls for investment funds – The Guardian

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By Huw Jones

LONDON (Reuters) – Britain’s market watchdog is resisting calls for stricter rules on investment funds, putting the regulator at odds with the Bank of England which wants tighter controls to prevent them becoming a source of contagion in financial markets.

The BoE has said these funds may need stronger controls after the turmoil triggered by the coronavirus pandemic exposed their potential threat to financial stability because unlike banks they do not hold reserves of capital.

Britain’s commercial property funds, for example, had to stop investors asking for their money back on a daily basis when extreme market volatility hit in March after economies entered lockdown.

Money market funds, a key source of short-term funding for companies, could have become a source of “contagion” during a COVID “dash for cash” had central banks not eased a liquidity crunch, the Bank of England said last month.

“How do we deal with the risks posed to financial stability by the structural tendency for money market and some other open-ended funds to be prone to runs, without having to commit scarce public money to costly support facilities?” the BoE said.

But Britain’s Financial Conduct Authority does not want to rush to impose tighter rules because investment funds can be an important source of cash for companies coping with the crisis.

“We are still very much in the context of a continuing health crisis,” Nausicaa Delfas, head of international at Britain’s Financial Conduct Authority (FCA), told Reuters.

“It’s important that we recognise that the non-bank sector is critical in enabling recapitalisation of companies to promote growth and recovery from the pandemic,” Delfas said.

“This is definitely looking to the medium and longer term.”

She said global and UK regulators are studying how the financial system operated during the early months of the crisis to see how banks, market infrastructure as well as non-banks functioned collectively under extreme stress.

The tension between central banks and securities watchdogs over regulating funds is not new, having surfaced in 2015 when the International Organization of Securities Commissions (IOSCO) torpedoed an attempt by the Financial Stability Board (FSB) to impose bank-like rules on big asset managers.

“The discussion has calmed down quite a lot since then and there is a recognition of the need to be fully informed,” a financial market source said.

The FSB referred to an April statement which said that while the pandemic has highlighted potential vulnerabilities in non-banks, it was important to reap the benefits of the dynamic sector and apply existing recommendations.

The FSB will update on its thinking next week.

The BoE noted in a Financial Policy Committee statement in May that “underlying issues need to be addressed once the immediate problems have passed.” The Bank has said it was in “close contact” with other authorities outside Britain.

An update on funds is expected on August 6 from the BoE.

But a senior funds industry official said Brexit and lack of global consensus on what should be done, leaves Britain with only limited room to reform a cross-border sector on its own beyond making a “noise.”

LOCAL PROBLEM?

Some regulators have noted there has been no global run on funds to indicate a systemic problem, one financial market source said.

March market volatility pointed to problems in the commercial paper market – used for short-term financing – rather than with the money market funds themselves, the source added.

This source said that about 95% of fund assets suspended globally in the pandemic were in UK property funds and that was because of an inability to value assets in extreme conditions.

Before the crisis, the shuttering of a flagship UK open-ended equity fund run by then star stockpicker Neil Woodford had created a sense urgency in Britain for fund industry reform.

But fundamental reform of money market and other open-ended funds like Woodford’s will be tough for Britain because 8,317 of 10,930 of those sold in the country come under European Union law, which Britain can no longer influence since Brexit.

And Britain’s finance ministry has said that there are no viable UK alternatives to EU money market funds in the short or medium term.

“Any action on sterling money market funds in the UK will likely be in the form of additional requirements on EU money market funds being sold in the UK,” said Sean Tuffy, head of market and regulatory intelligence at Citi Securities Services.

(Reporting by Huw Jones. Editing by Jane Merriman)

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