Russia's accession to the World Trade Organization (WTO) will benefit domestic importers and exporters and retailers, but the country's machinery and equipment industries are likely to suffer, Moody's Investors Service said on Thursday.
"The conditions of Russia's accession to the WTO include reducing the average ceiling on import tariffs to 7.8 percent from 10 percent, which in general should benefit consumers, stimulate demand and help companies that are significant importers," Moody's analyst Sergei Grishunin was quoted as saying in a Moody's report.
"Both food and non-food retailers will benefit because imports make up a considerable share of the retail market and the retailers will pass on only a relatively small portion of the tariff savings to end-consumers," he added.
The agency expects companies such as X5 Retail Group, Russia's largest grocery retailer, premium-class grocery retailer Azbuka Vkusa and its mid-class counterpart O'Key Group as well as M.video, one of Russia's top electronics and household appliances retailers, will benefit from the country's WTO accession.
"Domestic manufacturers of agricultural machinery and equipment, among other heavy goods makers, are likely to be hurt by WTO accession, Grishunin also said. "These companies' output is not competitive globally and they have limited capabilities to improve operational efficiencies."
In Moody's view, companies such as Russian auto maker GAZ and country's largest truck maker KamAZ may be the most affected.
As for non-ferrous metals, ferrous metals and chemicals producers, the benefits to them are still difficult to quantify in the short-term but positive signs will be seen mainly over the longer term, the report says.
