Seb Country Analysis Oct 2008 Russia

Russian Federation SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS

lÅíçÄÉê=OMI=OMMU

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : [email protected]

Since the summer investor sentiment towards Russia has turned increasingly bearish with  repercussions on the Russian banking system. That combined with rising risk of the present  global slowdown becoming a long haul story with soft oil markets, could change the prospects of  the Russian economy quite sharply. 

Country Risk Analysis =

lîÉêÜÉ~íáåÖ=íìêåë=áåíç=ëäçïÇçïåK===

Percent (annual)

= fåÑä~íáçå=êÉíìêåë=íç=ÇçìÄäÉ=ÇáÖáí=äÉîÉäëK=páåÅÉ=íÜÉ=ÖäçÄ~ä=Ñáå~åÅá~ä=íìêÄìäÉåÅÉ=ÄÉÖ~å= ëçãÉ=NR=ãçåíÜë=~Öç=íÜÉ=çéÉååÉëë=çÑ=íÜÉ=oìëëá~å=Å~éáí~ä=~ÅÅçìåí=Ü~ë=ÉñéçëÉÇ=áí=íç= íÜÉ=î~Ö~êáÉë=çÑ=áåíÉêå~íáçå~ä=ã~êâÉíëK==få=~ÇÇáíáçåI=oìëëá~=Ü~ë=ÄÉÉå=íÜêçìÖÜ=~å= ÉäÉÅíáçå=óÉ~ê=ïáíÜ=éçêâJÄ~êêÉä=éçäáÅáÉëK==_çíÜ=ÉîÉåíë=êÉëìäíÉÇ=áå=~=ã~êâÉÇ=ïÉ~âÉåáåÖ= çÑ=Ñáå~åÅá~ä=éçäáÅáÉëI=ïáíÜ=ãçåÉí~êó=éçäáÅáÉë=éêçÄ~Ääó=Ü~îáåÖ=íÜÉ=ä~êÖÉëí=áãé~Åí=~åÇ= ëÉåÇáåÖ=íÜÉ=oìëëá~å=áåÑä~íáçå=ê~íÉ=íç=ÇçìÄäÉ=ÇáÖáí=íÉêêáíçêóK=eçéÉë=~ë=ä~íÉ=~ë=çÑ=íÜÉ= ëìããÉê=OMMT=íÜ~í=áåÑä~íáçå=áå=oìëëá~=Ü~Ç=ÄÉÉå=ÄÉ~íÉå=çå=íÜÉ=êÉíêÉ~í=Ü~îÉ=ëáåÅÉ= íìêåÉÇ=áåíç=Çáë~ééçáåíãÉåí=~ë=íÜÉ=ÅçåëìãÉê=éêáÅÉ=áåÇÉñ=Ü~ë=êáëÉå=íç=NRB=çå=~å= ~ååì~ä=Ä~ëáëK==^=é~êí=çÑ=íÜ~í=Ü~ë=ÅÉêí~áåäó=ÄÉÉå=áå=äáåÉ=ïáíÜ=áåíÉêå~íáçå~ä=íêÉåÇë=çÑ= ÜáÖÜÉê=ÉåÉêÖó=~åÇ=ÅçããçÇáíó=éêáÅÉëI=Äìí=ãçëí=~å~äóëíë=~åÇ=íÜÉ=~ìíÜçêáíáÉë=êÉ~äáòÉ= íÜ~í=íÜÉ=ã~àçê=ÇêáîáåÖ=ÑçêÅÉ=Ü~ë=ÄÉÉå=ÇçãÉëíáÅ=çîÉêÜÉ~íáåÖK=== = Money and credit growth `êÉÇáí=ÇêáîÉå=ÖêçïíÜK==få=OMMTI= 60 íÜÉ=ÉÅçåçãó=~ÅÅÉäÉê~íÉÇ=íç=UKNB= 55 ÖêçïíÜ=~åÇ=ÅçåíáåìÉÇ=~í=~=Ñ~ëí= 50 Åäáé=ïÉää=áåíç=OMMUK==qÜ~í=ï~ë= 45 ÇêáîÉå=Äó=ã~åìÑ~ÅíìêáåÖ=~åÇ= ëÉêîáÅÉë=ïÜáäÉ=çáä=~åÇ=Ö~ë= 40 éêçÇìÅíáçåI=ÅçìåíáåÖ=Ñçê=~êçìåÇ=~= 35 èì~êíÉê=çÑ=íÜÉ=ÉÅçåçãóI=Å~ãÉ= 30 ~äãçëí=íç=~=ëí~åÇëíáääK==^ÖêáÅìäíìêÉI= 25 ÅçìåíáåÖ=Ñçê=RB=çÑ=íÜÉ=ÉÅçåçãóI= 2005 2006 2007 2008 ~äëç=Ü~Ç=~=Ä~Ç=óÉ~ê=Å~ìëÉÇ=Äó= éççê=Åäáã~íáÅ=ÅçåÇáíáçåëK==cçê=íÜÉ= Money supply M2 credits to private sector, RUB Ñáêëí=íáãÉ=áåîÉëíãÉåíë=Å~ãÉ=çìí=~ë= íÜÉ=ÇêáîáåÖ=ÑçêÅÉ=íç=dam=áå=OMMTI= áåÅêÉ~ëáåÖ=áíë=ëÜ~êÉ=çÑ=íÜÉ=ÉÅçåçãó=íç=ãçêÉ=íÜ~å=ONB=EOPB=áåÅäìÇáåÖ=áåîÉåíçêáÉëFI=~= ãçëí=ïÉäÅçãÉÇ=ëÜáÑí=áå=íÜÉ=Åçãéçëáíáçå=çÑ=ÇçãÉëíáÅ=ÇÉã~åÇ=ïáíÜ=êÉëéÉÅí=íç= ÅçåíáåìÉÇ=ÖêçïíÜK=eçïÉîÉêI=íÜ~í=ï~ë=ä~êÖÉäó=ÇìÉ=íç=Äìçó~åí=ÅçåëíêìÅíáçå=~ÅíáîáíóI= ïÜáÅÜ=êÉëéçåÇÉÇ=íç=~=ÜìÖÉ=ÅêÉÇáí=ÇêáîÉå=ÇÉã~åÇ=Ñçê=ÜçìëáåÖ=~åÇ=çíÜÉê=êÉ~ä=Éëí~íÉ=

Source: Reuters EcoWin

important your attention is drawn to the statement on the back cover of this report which affects your rights.

SEB Merchant Banking Country Risk Analysis October 20, 2008

Percent

USD/Barrel

áåÅäìÇáåÖ=çÑÑáÅÉ=ëé~ÅÉ=áå=jçëÅçï=~åÇ=píK=mÉíÉêëÄìêÖK==få=OMMTI=Ä~åâëÛ=ÅêÉÇáí= ÉñíÉåëáçå=~ÅÅÉäÉê~íÉÇ=íç=RMB=çå=~å=~ååì~ä=Ä~ëáëK==qÜ~í=ÇÉîÉäçéãÉåí=ï~ë=ÇÉåíÉÇ=Äó= íÜÉ=ëìÇÇÉå=ÇêóáåÖ=ìé=çÑ=äáèìáÇáíó=áå=íÜÉ=ÑçääçïáåÖ=Ñ~ää=~ë=íÜÉ=ä~êÖÉ=Å~éáí~ä=áåÑäçïë=çÑ= íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMT=íÉãéçê~êáäó=íìêåÉÇ=áåíç=~å=çìíÑäçïK=eçïÉîÉêI=~ë=íÜÉ=ÅÉåíê~ä= Ä~åâ=~ÅíÉÇ=íç=ÅçãéÉåë~íÉ=Ä~åâëÛ=êÉëÉêîÉ=äçëëÉë=íÜêçìÖÜ=ãçêÉ=ÖÉåÉêçìë=ìëÉ=çÑ=êÉéç= ~êê~åÖÉãÉåíë=~åÇ=íÜÉ=íê~åëÑÉê=çÑ=ãçåÉó=Ñêçã=ÖçîÉêåãÉåí=~ÅÅçìåíë=íç=ÅçããÉêÅá~ä= Ä~åâëI=íÜÉ=Ä~ä~åÅÉ=áå=íÜÉ=áåíÉêJÄ~åâ=ã~êâÉÇ=íìêåÉÇ=Ä~Åâ=íç=“åçêã~äÒ=áÑ=íÜ~í=áë=~=ï~ó= Çç=ÇÉëÅêáÄÉ=~=ëáíì~íáçå=çÑ=ÅäÉ~êäó=åÉÖ~íáîÉ=êÉ~ä=áåíÉêÉëí=ê~íÉëK==qÜ~í=Ö~îÉ=~=ëÜçêí=íÉêã= Ñáääáé=íç=Ä~åâëÛ=ÅêÉÇáí=ÉñíÉåëáçå=áå=É~êäó=OMMUK== = qÜÉ=çáä=éêáÅÉ=ÅçãÉë=ÇçïåK==oÉéçêíë=Ñêçã=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMUI=áåÅäìÇáåÖ=Ñêçã=ïÉääJ âåçïå=êÉéìí~ÄäÉ=çêÖ~åáò~íáçåëI=ÄÉÖáå=íç=ã~âÉ=ëçãÉ=éÉÅìäá~ê=êÉ~ÇáåÖK==tÜÉå=çáä= éêáÅÉë=ïÉêÉ=~í=íçé=íÜÉ=ïçêäÇÛë=ä~êÖÉëí=çáä=~åÇ=Ö~ë=éêçÇìÅÉê=ã~ó=Ü~îÉ=äççâÉÇ=äáâÉ=~å= ìå~ëë~áä~ÄäÉ=ëìÅÅÉëë=ëíçêóK==aÉëéáíÉ=íÜÉ=çåÖçáåÖ=ÅçåÅÉêåë=~Äçìí=íÜÉ=ïçêäÇ=ÉÅçåçãó= ã~êâÉíë=ÅçåíáåìÉÇ=ÄÉáåÖ=ìéJÄÉ~í=çå=oìëëá~=~åÇ=d~òéêçãI=oçëåÉÑí=~åÇ=çíÜÉê=oìëëá~å= ëí~íÉ=~åÇ=éêáî~íÉ=Åçãé~åáÉë=ïÉêÉ=~ÅíáîÉ=áå=íÜÉ=áåíÉêå~íáçå~ä=ÄçåÇ=~åÇ=ëóåÇáÅ~íáçå= ã~êâÉíëK==qÜ~í=~ÇÇÉÇ=äáèìáÇáíó=íç=íÜÉ=ÇçãÉëíáÅ=ãçåÉó=ã~êâÉíI=~äíÜçìÖÜ=íÜÉ=ë~ãÉ= Åçãé~åáÉë=ïÉêÉ=~äëç=ëÉåÇáåÖ=äçíë=çÑ=ãçåÉó=çìí=Ñçê=ãÉêÖÉêë=~åÇ=~ÅèìáëáíáçåëK==_ìí=çå= gìäó=TI=íÜÉ=çáä=éêáÅÉ=E_êÉåíF=éÉ~âÉÇ=~í=ANQTLÄ~êêÉäI=ïÜáÅÜ=åçï=íìêåë=çìí=íç=Ü~îÉ=ÄÉÉå= ~=ÖäçÄ~ä=éÉ~â=íÜáë=íáãÉ=~êçìåÇK==tÜáäÉ=íÜÉ=íìêåJ~êçìåÇ=ï~ë=åçí=~=ÖêÉ~í=ÅçåÅÉêå=áå= áíëÉäÑI=íÜÉ=ëìÄëÉèìÉåí=ëíÉÉé=Ñ~ää=íç=çåäó=Ü~äÑ=çÑ=íÜ~í=äÉîÉä=ëç=Ñ~ê=áë=~Äçìí=íç=Å~ìëÉ= oìëëá~=ëÉîÉêÉ=ÜÉ~Ç=~ÅÜÉK=== Stock markets, Oil price % change since EM peak in Oct. -07 = 150 20 qÜÉ=ëíçÅâ=ã~êâÉí=êÉ~ÅíëK== Putin Russia accuses 140 få=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMU= 10 Mechel íÜÉ=oìëëá~å=ëíçÅâ= 130 0 ã~êâÉí=Ü~Ç=ïÉ~íÜÉêÉÇ= 120 -10 íÜÉ=ÖäçÄ~ä=íìêÄìäÉåÅÉ= EM 110 -20 èìáíÉ=ïÉääI=~åÇ=ÇÉÅäáåÉÇ= Georgia war 100 -30 çåäó=ëäáÖÜíäó=ïÜáäÉ=çíÜÉê= ÉãÉêÖÉêë=áåÅäìÇáåÖ= 90 -40 `Üáå~=Ü~Ç=~äêÉ~Çó=í~âÉå= Oil price 80 -50 Oil price ëçãÉ=ÜÉ~îó=ÄäçïëK= dives 70 -60 eçïÉîÉêI=íÜÉ=ÉåÇ=çÑ=íÜÉ= 60 -70 çáä=éêáÅÉ=Äççã=ëÉåí=íÜÉ= okt feb apr jun aug okt ã~êâÉí=áåíç=~=í~áäëéáåK== 2007 2008 qÜ~í=ï~ë=Éñ~ëéÉê~íÉÇ=Äó= Source: Reuters EcoWin íÜÉ=Åä~ëÜÉë=ÄÉíïÉÉå=íÜÉ= ÑçêÉáÖå=~åÇ=ÇçãÉëíáÅ=çïåÉêë=çÑ=qkhL_m=áå=ïÜáÅÜ=íÜÉ=~ìíÜçêáíáÉë=ïÉêÉ=ëÉÉå=~ë= ~ÅíáåÖ=áå=~å=ìåÉîÉå=Ü~åÇÉÇ=ã~ååÉê=íç=íÜÉ=ÄÉåÉÑáí=çÑ=íÜÉ=ä~ííÉêI=~åÇ=íÜÉå=íÜÉ=mjÛëI= jêK=mìíáåI=éÉêëçå~ä=~ÅÅìë~íáçåë=~Ö~áåëí=çåÉ=çÑ=oìëëá~Ûë=ä~êÖÉëí=ëíÉÉä=ã~âÉêëI=jÉÅÜÉäI= Ñçê=éêáÅÉ=ÖçìÖáåÖK==qç=íçé=íÜÉ=~ÖÉåÇ~=çÑ=åÉÖ~íáîÉ=åÉïë=Ñçê=íÜÉ=ã~êâÉíëI=Å~ãÉ=íÜÉ= ÅçåÑäáÅí=ïáíÜ=dÉçêÖá~I=ïÜáÅÜI=êÉÖ~êÇäÉëë=çÑ=ïÜçÉîÉê=ï~ë=ìäíáã~íÉäó=êÉëéçåëáÄäÉI= ëìêéêáëÉÇ=ã~åó=ã~êâÉí=é~êíáÅáé~åíë=~åÇ=éêçÄ~Ääó=äÉÇ=íç=~=êÉ~ëëÉëëãÉåí=çÑ=éçäáíáÅ~ä= ëí~Äáäáíó=áå=oìëëá~K==^ë=~=êÉëìäí=çÑ=~ää=íÜÉëÉ=ÉîÉåíëI=íÜÉ=ëíçÅâ=ã~êâÉí=éäìåÖÉÇ=íç=äÉëë= íÜ~å=PMB=ÄÉäçï=áíë=óÉ~ê=~Öç=î~äìÉ=~ë=ãÉ~ëìêÉÇ=Äó=íÜÉ=oqp=áåÇÉñK==qÜ~í=áë=éêçÄ~Ääó= åç=ãçêÉ=íÜ~å=`Üáå~=Äìí=íÜÉ=êÉÅÉåí=oìëëá~å=Çêçé=Ü~ë=ÄÉÉå=ãìÅÜ=ëíÉÉéÉêK== = j~êÖáå=Å~ääë=áåÅêÉ~ëÉK==tÜáäÉ=êÉä~íáîÉäó=ÑÉï=oìëëá~å=Ä~åâë=Ü~îÉ=ÄÉÉå=ÇáêÉÅíäó= áåîçäîÉÇ=íÜÉãëÉäîÉë=áå=ÄìóáåÖ=ëíçÅâëI=ã~åó=çÑ=íÜÉã=Ü~îÉ=äÉåí=ÜÉ~îáäó=íç=Åçãé~åáÉë= ~åÇ=çíÜÉêë=ïÜáÅÜ=Ü~îÉ=ê~áëÉÇ=Ä~åâ=äç~åë=ïáíÜ=ëÜ~êÉë=~ë=Åçää~íÉê~äK==^ë=íÜÉ=î~äìÉ=çÑ= íÜÉ=Åçää~íÉê~ä=Ü~ë=åçëÉ=ÇáîÉÇI=ÇÉÄíçêë=Ü~îÉ=ÄÉÉå=~ëâÉÇ=íç=íçé=çÑÑ=ïáíÜ=Å~ëÜ=Eã~êÖáå= Å~ääëFK==_ó=~ää=äáâÉäáÜççÇI=ëçãÉ=ÄçêêçïÉêë=Ü~îÉ=~äêÉ~Çó=Ñ~áäÉÇ=íç=ãÉÉí=íÜçëÉ=Å~ääëI= 2

SEB Merchant Banking Country Risk Analysis October 20, 2008

Percent

RUB/$ (ruble weaker ->)

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SEB Merchant Banking Country Risk Analysis October 20, 2008

$/barrel

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4

SEB Merchant Banking Country Risk Analysis October 20, 2008

5

_çñ=NW=láä=éêáÅÉ=ëÅÉå~êáçë= = mêÉëÉåí=Å~ëÉW=láä=éêáÅÉ=ëí~óë=~êçìåÇ=ASRLÄ~êêÉäK= aÉëéáíÉ=íÜÉ=ìéÅçãáåÖ=lmb`=ãÉÉíáåÖ=lÅíçÄÉê=OQI= ~í=ïÜáÅÜ=~=èìçí~=êÉÇìÅíáçå=çÑ=ëçãÉ=NJO=ãÄéÇ=EãáääK= _~êêÉäë=éÉê=Ç~óF=áë=ïáÇÉäó=ÉñéÉÅíÉÇI=íÜÉ=çáä=éêáÅÉ= óÉëíÉêÇ~ó=ÅçåíáåìÉÇ=ëäáÇáåÖ=ÄÉäçï=TMLÄ~êêÉäK=^ë=~= ÄÉåÅÜã~êâ=ïÉ=~ëëìãÉ=íÜÉ=çáä=éêáÅÉ=ëí~ÄáäáòÉ=~í= ASRLÄ~êêÉäK=få=íÜáë=Å~ëÉ=oìëëá~=ã~ó=ÅçåíáåìÉ=íç=Çç= êÉ~ëçå~ÄäÉ=ïÉää=ïáíÜ=íÜÉ=ÉñíÉêå~ä=ÅìêêÉåí=~ÅÅçìåíë= áå=Ä~ä~åÅÉI=~åÇ=íÜÉ=ÉÅçåçãó=ÅçåíáåìáåÖ=íç=Üìã= ~äçåÖ=~í=ëçãÉ=RJSB=ÖêçïíÜ=~ÅÅçêÇáåÖ=íç=íÜÉ= lñÑçêÇ=bÅçåçãáÅë=ÖäçÄ~ä=ÉÅçåçãÉíêáÅ=ãçÇÉä=ïÉ= ëìÄëÅêáÄÉ=íçK=qÜ~í=ã~ó=ÄÉ=ÉåçìÖÜ=íç=ã~áåí~áå= éçäáíáÅ~ä=Å~äã=~äíÜçìÖÜ=íÜÉ=í~ëâ=çÑ=íÉääáåÖ=oìëëá~åë= íç=ëÅ~äÉ=Ççïå=íÜÉáê=ÉñéÉÅí~íáçåë=çÑ=ÅçåíáåìÉÇ=ê~éáÇ= êÉ~ä=áåÅçãÉ=ÖêçïíÜ=ïáää=ÄÉ=~=ÅÜ~ääÉåÖáåÖ=çåÉK= mêçîáÇÉÇ=íÜÉ=ïçêäÇ=ÉÅçåçãó=ÅçãÉë=Ä~Åâ=çå=íê~Åâ= áå=OMNMJOMNNI=oìëëá~=ëÜçìäÇ=Ü~îÉ=~=Ñ~áê=ÅÜ~åÅÉ=çÑ= ÅçãáåÖ=íÜêçìÖÜ=íÜÉ=íìêÄìäÉåÅÉ=ïáíÜçìí=ã~àçê= Ç~ã~ÖÉ=íç=áíë=êÉéìí~íáçå=~ë=~=ÄçêêçïÉêK==

120

8 6 4 2 0 -2 -4 -6

100 80 60 40

$/barrel

Percent

P re s e n t c a s e

20 0

2008 2009 2010 2011 C A /G D P %

GD P %

O ilp ric e

= = tçêëí=Å~ëÉ=ëÅÉå~êáçW=qÜáë=~ëëìãÉë=~=êÉéÉ~í=çÑ=íÜÉ= çáä=éêáÅÉ=Çêçé=çÑ=íÜÉ=ä~íÉ=NVVMë=ÑçääçïáåÖ=íÜÉ=^ëá~å= Åêáëáë=íÜ~í=ëíáÑäÉÇ=ÖäçÄ~ä=ÇÉã~åÇ=ÖêçïíÜ=Ñçê=~= ïÜçäÉ=óÉ~ê=~åÇ=ÜÉäéÉÇ=íêáÖÖÉê=íÜÉ=oìëëá~å=ÇÉÑ~ìäí= áå=^ìÖìëí=NVVUK=få=íÜ~í=óÉ~êI=íÜÉ=çáä=éêáÅÉ=ÑÉää=íç=äÉëë= íÜ~å=ANML=Ä~êêÉä=íç=êÉÅçîÉê=áå=ëìÄëÉèìÉåí=óÉ~êë=íç= íÜÉ=AOMJPMLÄ~êêÉä=ê~åÖÉK=tÉ=~ëëìãÉ=íÜ~í=íÜÉ=çáä= éêáÅÉ=åçï=ïçìäÇ=Ñçääçï=íÜÉ=ë~ãÉ=é~ííÉêå=çåäó= ~Äçìí=RMB=ÜáÖÜÉê=íç=í~âÉ=~ÅÅçìåí=çÑ=ìåÇÉêäóáåÖ= íêÉåÇ=~åÇ=áåÑä~íáçå=ìåíáä=íÜÉ=ëí~êí=çÑ=íÜÉ=çáä=éêáÅÉ= ëìêÖÉ=áå=ä~íÉ=OMMQK=få=ëìÅÜ=~=ëÅÉå~êáç=ÖêçïíÜ=ïáää= Çêçé=íç=PB=çîÉê=~=íïç=óÉ~êë=éÉêáçÇ=~åÇ=íÜÉ= ÉñíÉêå~ä=Ä~ä~åÅÉ=ïáää=ÄÉ=éìëÜÉÇ=áåíç=éÉêëáëíÉåí= ÇÉÑáÅáíë=çÑ=~êçìåÇ=QB=çÑ=dam=çå=íÜÉ=ÅìêêÉåí= ~ÅÅçìåíI=áãéäóáåÖ=êÉëÉêîÉ=äçëëÉë=~êçìåÇ=ATM=Äáääáçå= ~=óÉ~ê=Ñêçã=íÜÉ=íê~ÇÉ=~åÇ=áåÅçãÉ=ÇÉÑáÅáí=~äçåÉK= pÜçìäÇ=íÜ~í=ÅçãÄáåÉ=ïáíÜ=ÇáÑÑáÅìäíáÉë=áå= êÉÑáå~åÅáåÖ=çìíëí~åÇáåÖ=ÇÉÄí=Ñ~ääáåÖ=ÇìÉI=éêÉëÉåí= êÉëÉêîÉë=ÅçìäÇ=ÄÉ=~äãçëí=ïáéÉÇ=çìí=áå=PJQ=óÉ~êëK= ^äíÜçìÖÜ=oìëëá~=áë=ÄÉííÉê=éçëáíáçåÉÇ=íçÇ~ó=íÜ~å=áå= NVVU=áå=íÉêãë=çÑ=ÉÅçåçãáÅ=ëíêÉåÖíÜ=~åÇ=Ñáå~åÅá~ä= êÉëÉêîÉëI=áí=áë=~äëç=~=Åçìåíêó=çÑ=ãìÅÜ=ÜáÖÜÉê= ÉñéÉÅí~íáçåë=~ãçåÖ=íÜÉ=ÖÉåÉê~ä=éçéìä~íáçå=~ë= êÉÖ~êÇë=ëí~åÇ~êÇë=çÑ=äáîáåÖK==fí=ÅçìäÇ=éêçîÉ=~= ÑçêãáÇ~ÄäÉ=í~ëâ=íç=íÉää=íÜÉ=oìëëá~åë=íÜ~í=“Ü~ééó= íáãÉëÒ=~êÉ=ÖçåÉK== =

8 6 4 2 0 -2 -4 -6

120 100 80 60 40 20 0

$/barrel

W o rs t c a s e

Percent

íÜÉ=çáä=éêáÅÉ=ëáåÅÉ=OMMRI=íÜÉ=êÉÅÉåí= ãçåíÜë=Çêçé=ëÜçìäÇ=åçí=ÅçãÉ=~ë=~= ëìêéêáëÉK===kÉîÉêíÜÉäÉëëI=ìåíáä= êÉÅÉåíäó=íÜÉ=éêÉî~áäáåÖ=ãççÇ=ï~ë= íÜ~í=~äíÜçìÖÜ=ëçãÉ=É~ëáåÖ=ÅçìäÇ=ÄÉ= Éåîáë~ÖÉÇI=ÜáÖÜ=éêáÅÉë=ïÉêÉ=ÜÉêÉ=íç= ëí~óK==qÜ~í=ã~ó=åçï=ÄÉ=ìé=Ñçê= êÉîáëáçåK==pÜçìäÇ=íÜÉ=ïçêäÇ=ÉÅçåçãó= ÄÉ=áå=Ñçê=~=äçåÖ=äçï=ÖêçïíÜ=éÉêáçÇ= íÜÉ=çáä=éêáÅÉ=ïáää=êÉã~áå=ìåÇÉê= éêÉëëìêÉ=~ë=åÉï=éêçàÉÅíë=~í=~å= ~Çî~åÅÉÇ=ëí~ÖÉ=ÅçãÉ=çå=äáåÉ=áå=íÜÉ= åÉ~ê=íÉêãK==qÜ~í=ÅçìäÇ=~ÇÇ=ëçãÉ=PJQ= ãáää=Ä~êêÉäë=~=Ç~ó=çÑ=åÉï=Å~é~Åáíó= çîÉê=íÜÉ=åÉñí=ÅçìéäÉ=çÑ=óÉ~êëI=ïÜáÅÜ= ã~ó=ÄÉ=íçç=ãìÅÜ=Ñçê=lmb`=íç=êÉáå= áåK=^ÅÅçêÇáåÖ=íç=~=ê~ééçêí=Ñêçã=íÜÉ= rp=båÉêÖó=aÉé~êíãÉåíI=oìëëá~=ïáää= Äó=íÜÉ=ÉåÇ=çÑ=åÉñí=óÉ~ê=Ü~îÉ=~ÇÇÉÇ=O= ãáääáçå=Ä~êêÉäë=~=Ç~ó=çÑ=åÉï= íê~åëéçêí=Å~é~Åáíó=Ñçê=áíë=çïå=~åÇ= h~ò~âÜ=çáä=çìíéìíK=båÅçìê~ÖÉÇ=Äó= êÉÅÉåí=óÉ~êë=ÜáÖÜ=éêáÅÉëI=çìíéìí=áë=çå= íÜÉ=êáëÉ=áå=ëÉîÉê~ä=é~êíë=çÑ=íÜÉ=ïçêäÇI= ïÜáäÉ=Ö~ë=ÖìòòäáåÖ=prsÛë=~êÉ= ê~éáÇäó=ÖÉííáåÖ=çìí=çÑ=Ñ~ëÜáçåK=_~ëÉÇ= çå=éêÉîáçìë=ÉñéÉêáÉåÅÉ=íÜÉ=çáä=éêáÅÉ= ÅçìäÇ=ëççå=ìåÇÉêëÜççí=ÉîÉå=áíë=äçåÖ= íÉêã=íêÉåÇK==^í=~=ëíáää=ëíêçåÖ=éêáÅÉ=çÑ= ASMJTMLÄ~êêÉäI=oìëëá~=åÉñí=óÉ~ê=ïáää= äáâÉäó=ÄÉÖáå=êìååáåÖ=~=íïáå=ÇÉÑáÅáí= EÅìêêÉåí=~ÅÅçìåí=~åÇ=ÑáëÅ~ä=Ä~ä~åÅÉ= ÇÉÑáÅáíë=íçÖÉíÜÉêFK==qÜ~í=ïçìäÇ=ëíáää= ÄÉ=~ÅÅÉéí~ÄäÉ=Ñêçã=~=ã~Åêç= ÉÅçåçãáÅ=éÉêëéÉÅíáîÉI=Äìí=ëÜçìäÇ= íÜÉ=éêáÅÉ=Ñ~ää=íç=íÜÉ=APMJQMLÄ~êêÉä= EíÜÉ=äÉîÉä=çÑ=OMMQFI=íÜÉ=ÖçîÉêåãÉåí= ã~ó=Ü~îÉ=íç=~Çàìëí=éçäáÅáÉë=áå=~= ãçêÉ=é~áåÑìä=ã~ååÉêK==E_çñ=NW=“láä= éêáÅÉ=ëÅ~åÉê~áçëÒKF=aìêáåÖ=Üáë=íïç= íÉêãë=áå=çÑÑáÅÉI=ÑçêãÉê=éêÉëáÇÉåí= mìíáå=Ü~ë=åçí=ÄÉÉå=ÅçåÑêçåíÉÇ=ïáíÜ= íçìÖÜ=ÉÅçåçãáÅ=ÇÉÅáëáçåëI=Äìí=ê~íÜÉê= ÄÉÉå=~ÄäÉ=íç=ÇáÖ=áåíç=~=ê~éáÇäó= ÖêçïáåÖ=çáä=ïÉ~äíÜK=få=íÜçëÉ=óÉ~êë= íÜÉ=ÄìÇÖÉí=ïÉåí=Ñêçã=~å=çáä= ÇÉéÉåÇÉåÅó=ïÜÉêÉ=áí=ïçìäÇ=Ä~ä~åÅÉ= ~í=ANULÄ~êêÉä=áå=OMMO=íç=ëçãÉ= ASMLÄ~êêÉä=áå=OMMUK==qÜÉ=í~ëâ=çîÉê= íÜÉ=åÉñí=ÑÉï=óÉ~êë=ã~ó=åçí=çåäó=ÄÉ= íç=ëí~ÄáäáòÉ=áåíÉêå~ä=~åÇ=ÉñíÉêå~ä= Ä~ä~åÅÉëI=Äìí=~Åíì~ääó=íç=êÉÇìÅÉ= ÖçîÉêåãÉåí=ëéÉåÇáåÖI=åçêã~ääó=~=

2008 2009 2010 2011 C A/G D P %

GD P %

O ilp ric e

=

SEB Merchant Banking Country Risk Analysis October 20, 2008

îÉêó=ÅÜ~ääÉåÖáåÖ=í~ëâ=Ñçê=~åó=ÖçîÉêåãÉåíK== = oáëâë=íç=éçäáíáÅ~ä=ëí~ÄáäáíóK==qÜÉ=éçéìä~êáíó=çÑ=ÑçêãÉê=mêÉëáÇÉåí=~åÇ=åçï=mjI=jêK== mìíáåI=áë=ìåÇáëéìíÉÇ=Äó=~åó=ëÉêáçìë=çÄëÉêîÉêK==qÜ~í=ÇÉêáîÉë=åçí=çåäó=Ñêçã=Üáë=êÉáÖå= çîÉê=çåÉ=çÑ=íÜÉ=ãçëí=ëéÉÅí~Åìä~ê=ÖêçïíÜ=éÉêáçÇë=oìëëá~=Ü~ë=ÉîÉê=ÉñéÉêáÉåÅÉÇI=Äìí= ~äëç=Ñêçã=íÜÉ=Ñ~Åí=íÜ~í=ÜÉ=éêÉëÉåíÉÇ=ëçãÉ=êÉëíçê~íáçå=çÑ=äáîáåÖ=ëí~åÇ~êÇë=Ñçê=íÜÉ= Åçããçå=ã~åI=~ÑíÉê=íÜÉ=vÉäíëáåJÉê~=çÑ=íÜÉ=NVVMë=Ü~Ç=ÅêÉ~íÉÇ=~=ó~ïåáåÖ=Ö~é=ÄÉíïÉÉå= êáÅÜ=~åÇ=éççêK==eáë=ëìÅÅÉëëçêI=mêÉëáÇÉåí=jÉÇîÉÇóÉîI=çïÉë=ãìÅÜ=çÑ=Üáë=éçéìä~êáíó=íç= jêK=mìíáåI=~åÇ=íÜÉ=íïç=~êÉ=çÑíÉå=êÉÖ~êÇÉÇ=~ë=çåÉ=éçäáíáÅ~ä=ÉåíáíóK=eçï=Üáë=ïáää= éÉêÑçêã=áå=íáãÉë=çÑ=ãçêÉ=ÜÉ~ÇïáåÇë=áë=ëíáää=ìåíÉëíÉÇK==pçãÉ=çÄëÉêîÉêë=ë~ï=íÜÉ= dÉçêÖá~å=ÅçåÑäáÅí=~ë=~=ÄÉÖáååáåÖ=çÑ=éçíÉåíá~ä=éçäáíáÅ~ä=áåëí~Äáäáíó=~ë=áí=ÅçìäÇ=ê~áëÉ= íÉåëáçåë=ÄÉíïÉÉå=éçäáíáÅ~ä=Ü~êÇ=äáåÉêë=~åÇ=ÄìëáåÉëë=áåíÉêÉëíë=ïáíÜáå=íÜÉ=éçäáíáÅ~ä=ÉäáíÉK=== JGJ= tÜáäÉ=íÜÉ=fjc=ã~ó=ÄÉ=êáÖÜí=íÜ~í=oìëëá~Ûë=ëìÅÅÉëë=áë=åçí=“ÁãÉêÉäó=~å=çáä=ëíçêóÒ=íÜÉêÉ= áë=~=ÖêçïáåÖ=~ï~êÉåÉëë=~ãçåÖ=çíÜÉêë=íÜ~í=oìëëá~=áë=åçí=ïÉää=ÉèìáééÉÇ=íç=ãÉÉí=~=äçåÖ= ÄÉ~êáëÜ=çáä=ã~êâÉí=~ë=ãìÅÜ=çÑ=êÉÅÉåí=óÉ~êëÛ=çáä=ïÉ~äíÜ=Ü~ë=ÄÉÉå=ëéÉåí=áå=~=ã~ååÉê= íÜ~í=Ü~îÉ=ìåÇìäó=ê~áëÉÇ=ÉñéÉÅí~íáçåë=çÑ=íÜÉ=óÉ~êJÄóJóÉ~ê=äáÑíáåÖ=çÑ=äáîáåÖ=ëí~åÇ~êÇëK== táíÜ=ARUM=ÄáääK=çÑ=êÉëÉêîÉëI=ÜçïÉîÉêI=íÜÉ=Åçìåíêó=ëÜçìäÇ=Ü~îÉ=~=ÇÉÅÉåí=ÅìëÜáçå=íç=Ñ~ää= Ä~Åâ=çåI=áÑ=íÜÉ=çáä=ã~êâÉí=ëí~ÄáäáòÉë=~í=íÜÉ=éêÉëÉåí=äÉîÉä=Ñçê=íÜÉ=åÉñí=ÑÉï=óÉ~êëI=íÜ~í=áë= ïáíÜ=~å=çáä=éêáÅÉ=ÅçãÑçêí~Ääó=~ÄçîÉ=ASMLÄ~êêÉäK==qÜ~í=ÅçìäÇ=ÉîÉå=ÄÉ=~=Äççå=~ë=áí=ã~ó= ÜÉäé=ÅçêêÉÅí=ÉñéÉÅí~íáçåë=~åÇ=áãéêçîÉ=éÉçéäÉëÛ=êÉÅÉéíáîÉåÉëë=íç=~êÖìãÉåíë=Ñçê=ãçêÉ= êÉëíê~áåí=~åÇ=íÜÉ=åÉÉÇ=íç=~îçáÇ=~åó=ÑìêíÜÉê=Éêçëáçå=çÑ=ÅçãéÉíáíáîÉåÉëëK==qÜ~í= ÅçãÄáåÉÇ=ïáíÜ=~=Äççëí=íç=íÜÉ=~ÅÅÉéí~åÅÉ=çÑ=tql=ãÉãÄÉêëÜáéI=ïÜáÅÜ=ëÉÉãë=íç=Ü~îÉ= ëäáééÉÇ=áå=êÉÅÉåí=íáãÉëI=ãáÖÜí=ÄêáåÖ=oìëëá~=Ä~Åâ=íç=ëíêçåÖÉê=ÇáîÉêëáÑáÅ~íáçå=~åÇ=íÜÉ= ÇÉîÉäçéãÉåí=çÑ=ÅçãéÉíáíáîÉ=íê~Ç~ÄäÉ=áåÇìëíêáÉëI=ëÉÅíçêë=ïÜáÅÜ=Ü~îÉ=ëìÑÑÉêÉÇ=êÉä~íáîÉ= íç=íÜÉ=åçåJíê~Ç~ÄäÉ=ëÉÅíçêëK==^åó=çáäJéêáÅÉ=ÄÉäçï=íÜ~í=äÉîÉäI=ÜçïÉîÉêI=ÅçìäÇ=éìí=íÜÉ= éçäáíáÅ~ä=Éëí~ÄäáëÜãÉåí=íç=~å=áåÅêÉ~ëáåÖäó=ëÉêáçìë=íÉëíI=ïáíÜ=éçëëáÄäÉ=êÉéÉêÅìëëáçåë=çå= éêìÇÉåí=ÉÅçåçãáÅ=éçäáÅó=ã~âáåÖ=~åÇ=éçäáíáÅ~ä=ëí~ÄáäáíóK==qÜÉëÉ=~êÉ=ÅÜ~ääÉåÖáåÖ=íáãÉë= Ñçê=oìëëá~I=~=Åçìåíêó=~í=Öêçëë=êç~ÇëK=== = Key ratios

2008

Population (mill)

141,8

GDP/capita ($)

1804

GDP/capita (US$)

12722

Inflation

13,4%

Curr.Acc.Balance/GDP

Investments/GDP

12 10

6

Macro balance

Liquidit

4 2 0

Absence of event risk

16 27,0%

Government debt/GDP

Resilience 8

7,8%

Reserves/imports (months)

bñíÉêå~ä=ê~íáåÖëW= cáíÅÜW===___H= pCmW==___H

How to read the chart? Moving out from the center reduces risk.

Russia Mexico

4,7%

Information Average EM

mÉÉêëW

Graph: Russia's risk profile is "flat" with strengths on

jÉñáÅç= `Üáå~= h~ò~âÜëí~å=

liquidity and macro balanc , but weaker on long term factors including resilience . The steep oil price fall may pose a new threat to political stability, temporarily calmed by smooth power transfer to a new President in March '08.

= =

6

=

SEB Merchant Banking Country Risk Analysis October 20, 2008

Key data: 2003 2004 2005 2006 GDP (bill.US$) 432,6 591,8 763,2 990,9 GDP/capita (US$) 2975 4090 5302 6919 GDP (%chg) 8,2% 7,2% 6,4% 7,3% Investments/GDP 18% 19% 20% 22% Budget balance/GDP 1,4% 4,5% 7,7% 8,4% Govt debt/GDP 32% 24% 16% 10% CPI inflation (% chg) 13,7% 10,9% 12,7% 9,7% Money demand (%chg) 47% 40% 36% 45% 36% 33% 31% 92% Stock prices (%chg) Interest rates 16,5% 13,3% 12,8% 11,5% Exch. Rate ($) 31 29 28 27 Trade/GDP (%) 49% 47% 48% 47% Oil price (Brent) $29 $38 $54 $65 Millions US $ 135 930 183 207 243 799 303 550 Export of goods Imports of goods 76 069 97 382 125 433 164 280 Other: -24 451 -26 312 -33 958 -44 930 Current account ($ mill) 35 410 59 513 84 408 94 340 (% of GDP) 8,2% 10,1% 11,1% 9,5% FDI -1 767 1 662 119 6 551 Loan repayments -10 898 -12 725 -32 487 -37 479 Net other capital flows -1 491 -15 386 7 187 32 332 21 255 33 063 59 227 95 744 Balance of payments Reserves 60 997 94 060 153 287 249 031 Total debt 166 850 198 450 232 850 285 475 o/w short term debt 31 650 32 325 39 950 54 300 Source: OEF (Oxford Economic Forecasting) and SEB estimates. Rating history Fitch (eoy) S&P (eoy) Type of government: Next elections Other: Latest PC deal Latest IMF arrangements

B+ BBBB+ B+ BB BB Presidential democracy Presidential elections 2012

BBBBB+

2007

2008

2009

2010

1 294,3 9083 8,1% 25% 6,1% 7% 9,0%

1 755,6 12383 6,8% 26% 4,0% 5% 14,3%

2 007,0 14228 4,8% 26% 1,0% 5% 10,7%

2 376,4 16936 5,2% 27% 0,0% 5% 8,4%

50%

30%

30%

23%

27% 10,1% 26 45% $73

10,8% 24 46% $103

10,4% 26 39% $65

9,9% 25 37% $65

354 400 223 485 -54 675 76 240 5,9% 9 159 -27 759 95 547 153 187 402 218 411 724 90 125

494 586 308 012 -81 573 105 001 6,0% 3 773 -26 424 61 033 143 383 545 601 596 917 110 910

433 489 355 255 -66 768 11 466 0,6% 6 582 -23 855 56 692 50 886 596 487 798 687 159 292

473 200 404 155 -64 716 4 329 0,2% 5 331 -25 686 50 076 34 051 630 538 998 940 208 976

BBB BBB

BBB+ BBB+

1999/active 1998/SBA S to c k m a rk e t

S p r e a d (E M B I) 900

2500

800

2250

700

2000 1750 1500

500

Index

Basis Points

600

400

1250 1000

300

750

200

500

100

250 0

0 03

04

R us s i a (b o tto m )

05

06

07

01

08

02

03

04

05

06

S o u rc e : R e u te rs E c o W i n

08

S o u rc e : R e u te rs E c o W i n

B a n k C re d it to P riv a te s e c to r

In te rn a tio n a l R e s e rv e s

1 7,5

6 00

1 5,0

5 00

1 2,5 USD (billions)

RUB (thousand billions)

07

G lo b a l (to p )

1 0,0 7,5

4 00 3 00 2 00

5,0

1 00

2,5

0

0,0

01

02

03

04

05

06

07

08

S o u rce : R e u te rs E co W i n

01

02

03

04

05

06

07

08

S o u rc e : R e u te rs E c o W in

= = = = 7

=

SEB Merchant Banking Country Risk Analysis October 20, 2008

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