Entries Tagged 'Finance' ↓

The Budget of the Russian Federation for 2010 has been reviewed by President Dimitrii Medvedev, and will be approved after some corrections of the Ministry of Finance, writes Vedomosti newspaper.

Budget expenditure will be 9.822 trillion ruble, income – 6.636 trillion ruble and a deficit of 3.186 trillion ruble.

The volume of budget deficit was increased by 7.5% creating a budget deficit of 500 billion ruble.

To cover the deficit, the Ministry of Finance may borrow from the domestic market 962 billion ruble and the external market 649 billion ruble.

Taking into account the average of 34.5 of the Russian currency against the U.S. dollar, external borrowing size could reach 19 billion dollars, which would increase the external state debt of the Russian Federation.

Authorities in Beijing will use part of the country’s foreign reserves of 2,132 billion dollars – the highest in the world – to support and accelerate the expansion and external acquisitions of Chinese companies, said Prime Minister Wen Jiabao. Wen also said that authorities want Chinese firms to increase their share of world exports.

The strategy of expansion abroad is meant to encourage foreign investments and acquisitions, especially those of large industrial groups owned by the state such as PetroChina , Chinalco, China Telecom and Bank of China.

“We need to hurry the implementation of the ‘out in front’ and currency reserves to combine with our company expansion,” said Jibao, in a speech delivered in front of Chinese diplomats.

The strategy “going out” is a slogan to encourage investments and acquisitions abroad, especially through state giants PetroChina, Chinalco, China Telecom and Bank of China.

Hungary plans to withdraw from the remaining installments of a loan from the International Monetary Fund (IMF) scheduled for this year and instead focus on 2010, when it plans to issue bonds denominated in euro, according to an official in Budapest, quoted by Dow Jones agency.

On the other hand, Hungary would be able to access the first tranche scheduled for 2010 of the loan, said the general director of the agency’s executive management of public debt, Andras Laszlo Borbely.

The Hungarian financial market ground to a halt in October of last year due to the global credit crisis, so the government in Budapest made a funding arrangement with the IMF European Union (EU) worth around 20 billion euro.

The authorities have made use of loans to finance its debts in April, when the government began again to issue bonds, initially small amounts, which were gradually increased in July, Mediafax notes.

On Thursday, the Hungarian agency for the administration of public debt issued bonds denominated in forints worth 84.5 billion forints (about 300 million euro). On Friday the agency completed the first issue of bonds denominated in euro made since the onset of global crisis, amounting to one billion euro.

Yesterday Goldman Sachs, the most important financial institution on Wall Street, reported a profit for the second quarter of $3.4 billion, up a whopping 89%. The size of the profit caught many analysts by surprise, with some saying it was one of the most tangible signs that the financial crisis is nearing an end.

Despite Goldman’s stellar quarter, the results of other banks are less encouraging. Georges Ugeux, Chairman of Galileo Global Advisors, is of the opinion that to assess the recovery of financial system we must evaluated health of commercial banks, not investment banks.

“To see if the financial system was repaired, we must analyze the impact of the crisis at banks that are engaged in private credits”, says Ugeux. “The bank results may be less encouraging.”

One example is CIT Group, which today is struggling with bankruptcy. For this reason, the financial results of JP Morgan and Morgan Stanley this week will be more telling.

Chairman of Galileo Global Advisors, Ugeux is Dr. in Law and Bachelor of Economics at the Catholic University of Louvain in Belgium. He was a banker at Societe Generale, Morgan Stanley, Kidder Peabody, President of the European Investment Fund and Chairman of International Division NYSE. Galileo Global Advisors is a bank and consulting business founded by him.

The IMF mission in Ukraine will recommend that the Fund grant the third tranche of an existing loan that will benefit the country’s struggling economy. The tranche amounts to $3.3 billion, out of a total loan amount of $16.4 billion.

The recommendation was made after the government in Kiev promised to reduce spending in the next period, writes Bloomberg News. “We managed to reach an agreement,” said Ceila Pazarbasioglu, IMF mission chief in Kiev. “Ukraine has met all quantitative criteria, including the international reserves, and made real progress in terms of strengthening the banking system.”

A loan from the International Monetary Fund for Ukraine, with which to pay debts to Russia, is the only solution to avoid a new crisis of gas, in conditions in which the European Union has already announced that he has no money to help former socialist republic, badly affected by the financial crisis.

Ukraine needs 4 billion dollars (3 billion euro ) for the storage and purchase of gas from Russia for the winter.