BP plc (ADR) (BP): Ratings Firm Warns of Economic Slowdown in Russia

Another cause for concern is the large number of Russian companies still in state hands. Analysts at S&P pointed to a slowdown in the privatization drive which Russia announced years ago as a way to reduce state presence in the economy. The government last year raised $5.2 billion by selling 7.6 percent in Russia’s biggest bank Sberbank but still held on to 57.6 percent in the company. Russia’s second-largest bank, VTB, is getting ready for a stock issue later this month with an eye to cut down the government’s share from 75 to 61 percent.

Stukenbrock said these can hardly be “considered to be privatizations in a sense that the government did this in order to liberalize the economy and reduce the influence of the state — rather it was done with a purpose of raising funds or capitalizing the bank.”

Investors have been frustrated by the low amount of the shares on offer and the fact that Russia’s most lucrative state-owned assets like oil firm Rosneft are not on the privatization schedule.

The article Ratings Firm Warns of Economic Slowdown in Russia originally appeared on Fool.com and is written by Associated Press.

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