Arguments over Russia's privatisation programme are bad news for equity capital markets bankers in Moscow

The big carrot for banks expanding in Russia has been Putin's big privatisation push. The Russian government had been expected to raise $70bn in funds by selling stakes in some of the country's biggest companies between now and 2017. Various banks appear to have been hiring in anticipation of this.

The good news is that some privatisations are definitely going ahead. The Russian government approved the first part of the privatisation programme yesterday. Under this, there are plans to sell Rb300bn ($9.31bn) worth of assets this year, including stakes in Sberbank and Alrosa, a diamond miner.

This looks quite impressive given analysts at JPMorgan were predicting only $300m of privatisations in Russia this year only a few months ago.

However, it's not all good news. Last month, Vladimir Putin said privatisations in the massive Russian energy sector would be cancelled after Igor Sechin, the deputy prime minister and anti-privatisation campaigner was appointed CEO of Rosneft. Instead of being privatised, Putin said Russia's stakes in energy companies should be consolidated into the state investment vehicle Rosneftegaz.

Yesterday, Russian prime minister and pro-privatisation campaigner Dmitry Medvedev contradicted this message. Rosneft's privatisation will go ahead, said Medvedev, but not until 2016. This is a setback given the Russian government had planned to sell a 15% stake of Rosneft, worth 200 billion roubles ($6.2 billion), this year.

Even with energy companies excluded from the privatisation programme, the following companies will be included according to website Russia Beyond the Headlines.  However, Reuters points out that none of these privatisations are assured: each one must be individually approved by the government before it goes ahead. Signs of disagreement between Putin and Medvedev are worrying, therefore.

Source: Russia Beyond the Headlines