Russian Economy

Russian Economy Stalls in Q3

Russian Economy Stalls in Q3


The Russian GPD posted zero growth in the three months to September, following a revised 0.14 percent expansion in the previous period, as a rise in internal trade and real estate activities was not enough to offset a drop in manufacturing.

On a quarter-on-quarter seasonally adjusted basis, fishing and farming activities shrank the most by 3.5 percent, followed by restaurants and hotels (-1.63 percent), health and social services (-0.88 percent) and construction (-0.8 percent). Manufacturing contracted 0.44 percent and the mining sector dropped 0.51 percent.
In contrast, financial activities posted the highest gain (3.26 percent), followed by agriculture (1.41 percent), internal trade (0.69 percent) and real estate (0.63 percent). Transportation grew 0.13 percent.
Year-on-year, the economy advanced 0.7 percent, slowing for the third straight quarter.

Joana Taborda |
12/12/2014 1:49:39 PM

Russia Trade Surplus at 3-Month Low

Russian trade surplus shrank 24 percent to USD 12.93 billion in December of 2014 after declining 25 percent a month earlier.

Year-on-year, exports shrank 24.1 percent to USD 37.6 billion, following a 21.7 percent drop in November. Shipments to countries outside the Commonwealth of Independent States (CIS) dropped 23.5 percent while sales to the CIS countries – Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan – fell 27.1 percent.
Imports declined 24 percent to USD 24.7 billion. Purchases from the non-CIS countries fell 21.9 percent while those from the CIS countries dropped 39.2 percent.
In November of 2014, Russia posted a USD 13.6 billion surplus.
Considering last three months of 2014, exports shrank 17.4 percent year-on-year while imports decreased at a faster 19.4 percent.

Central Bank of Russia | Joana Taborda |
2/11/2015 1:16:12 PM

The satire of the trades


This story is part of an ancient Egyptian text known as ‘The teaching of Duaf’s son Khety’. A father is taking his son to scribe school where the boy will learn how to read and write. The father is telling his son why being a scribe is the best profession in the world. He emphasises how good the life of a scribe is by comparing it to the lives of craftsmen and others.

Although the father speaks badly of the other professions, he probably does not mean it as strongly as it sounds. More likely, he is making it seem that life is very bad for other people so that he can convince his son to become a scribe


The teaching of Duaf’s son Khety ‘

‘I will make you love writing more than your mother,
I will show its beauties to you;
Now, it is greater than any trade,
There is not one like it in the land


The teaching of Duaf’s son Khety ‘

…I have seen the metal-worker working
At the mouth of his furnace;
With fingers like the stuff of a crocodile
He stinks more than fish eggs.


The teaching of Duaf’s son Khety ‘

Carpenters working.
The carpenter who uses an adze,
He is more tired than a worker in the fields;
His field is the wood, his hoe the adze.
His work is endless…


The teaching of Duaf’s son Khety ‘

Jewellery workshop.
The jeweller drills with his chisel
In different kinds of stone;
Once he is done with the inlay of the eyes
His arms are weary, he is tired;
Sitting down at sunset,
His knees and back ache.


The teaching of Duaf’s son Khety ‘

Razor, comb, tweezers and other grooming tools.
The barber is still shaving at the end of the day,
To the town he takes himself,
To his corner he takes himself,
From street to street he takes himself
To search for people to shave.
He works with his arms to fill his belly,
Like a bee which can only eat as it has worked.


The teaching of Duaf’s son Khety ‘

A statue of a scribe.
Look, no trade is free from a director,
Except the scribe’s: he is the director.
But if you know writings, it will be better for you,
More than these trades I have shown you



Craftsmen in ancient Egypt were usually trained and skilled labourers. They were often well-respected in the community and had a comfortable lifestyle. Yet every craftsman’s lifestyle and social standing depended on the quality of his skills and experience. Thus, some craftsmen had more difficult lives than others.Ancient Egyptian workshopMost craftsmen worked in workshops with other craftsmen. Objects for temples or the pharaoh were made in temple workshops or palace workshops. Objects for ordinary people were made by local craftsmen in small workshops.

Stock market prices are a terrible thing to anchor to Indraneal Balasubramanian Indraneal Balasubramanian, Engineer+Finance MBA by training

I have often seen people knowingly or unknowingly anchoring to the price of a stock, perceiving say a Rs 100 stock as cheaper than a Rs 1000 stock. Not only is this is bad because as an investor you should be worrying about the business fundamentals not the share price fluctuations, but does not consider the size of the business or the scale of it’s sales or profitability at all.

To illustrate this idea, consider the following

MRF Limited
Current Price: Rs 39557

Nestle India Limited
Current Price:  Rs 6923

Gati Limited
Current Price Rs 224

ITC Limited
Current Price: Rs 332

What does this tell you? Absolutely nothing of value on its own. This isn’t a race where a share starts at it’s face value of say 10 and continues growing from there on. Along the way, adjustments like splits, bonuses and share buybacks need to be considered.

Thus we get to the idea of number of shares outstanding. When you buy a share, you are buying a small % of the company, or to be precise 1/(no of shares outstanding of the company). You can use this multiple to figure out the market capitalization of the company as well as the total earnings.

Assume this cake represents the business

Each slice represents a share of the goods. Whether you slice it 10 ways or 20, the size of the cake is not affected by how it is sliced, only the size of the slice is changed. The quality of the cake is also completely independent of the size and manner of slicing. You can have a terrible large cake or a wonderful small cake (and vice versa) depending on the skill of the baker (management) and the ingredients used (fundamental economics of the business)

This post might seem simplistic to those who are aware of fundamental valuation, but I think this basic analogy needs to be drilled into every investor’s head.

Business Value Creation

Sustainable Value Creation is a new mode of business that addresses fundamental societal issues by identifying new, scalable sources of competitive advantage that generate measurable profit & community benefit.

Business at its best is organised around five implementation imperative for planning , managing & scaling a sustainable value creation strategy.

These imperatives are:

  • Recognise the opportunity: Analyse the root causes of existig core business challenges to uncover underlying societal problems, that if addressed, may lead to new source of competitive advantage.
  • Recalibrate your Radar : Pinpoint the optimal role the company can play in helping to address those issues by expanding internal & external networks to tap into trends. Improve the companys ability to screen ideas based on needs, uniqueness, strategic fit & core competencies.
  • Research, Develop , Repeat : Plan& manage sustainable value creation initiatives as R&D projects & subject them to the same rigor as any corporate initiative, accomadating an iterative development cycle & being prepared to learn from setbacks.
  • Rewire the Organisation : When bringing a project to scale, embed new governance structures, communications, incentives & metrics.
  • Reinforce the Value : CEOs will need to assume leadership to ensure the entire company remains focused & motivated & its stakeholders committed.

All economic activity needs a moral compass When we allocate capital to an enterprise Saker Nusseibeh The Observer, Sunday 25 January 2015

Traders at the New York Stock Exchange: we need to think in terms of our future wellbeing, not just nominal returns. Photograph: Brendan McDermid/Reuters

  • suspend belief in unprovable economic theory and employ those most intrinsic British qualities: common sense and moral compass.
  • Since I am by profession an investor, let me start by asking a rather simplistic question: what is the purpose of investment? Common sense would surely steer one away from what most assume Milton Friedman’s answer would be – to maximise financial returns within the bounds of the law.

Traders at the New York stock exchange