Moscow Exchange sets IPO price range and date

Author: us-russia
Comments: 0
Moscow Exchange sets IPO price range and date
Published 4-02-2013, 11:09
A major element in Russia's bid to woo international investors, the IPO of the Moscow Exchange has been given an initial price range that will value it at between €3.0bn and €3.4bn. Russia's major stock exchange hopes to raise up to RUB15bn (€368m) from the share sale, with final pricing due on February 15. 
Moscow Exchange said on February 4 the plan involves the sale of RUB9bn worth of shares by existing shareholders, with another RUB6bn to come via newly-issued shares. It could also extend the offer by RUB5bn depending on demand. State giant VTB Capital, which is acting as a stabilising manager for the float, will have the right to acquire up to 13% of the offer, which is looking for RUB55-63 per share. The roadshow kicks off on February 4 in Moscow, before heading overseas later this week. 

Moscow Exchange shareholders – the Central Bank of Russia (CBR) and a gaggle of local investment banks for the most part - willing to sell their stakes submitted applications over the weekend. Minorities can offer their shares at any price during the offering. The two largest stakeholders – the CBR with a 24.3% stake, and the other state monolith, Sberbank, with 10.3% - have both said they will not be selling. 

The listing is a key stage in ongoing reform and development of Russia's capital markets, and is designed to improve transparency and liquidity, with an eventual ambition to see Moscow become a major global financial centre. However, Russia's IPO fortunes have proved extremely volatile in the years since the crisis first hit in 2008, so the state is doing its utmost to make sure this float is a success. 

Moscow Exchange announced last week that it will float on its own exchange as part of a wider Kremlin strategy to boost Russian issues on the domestic market. The same week, President Vladimir Putin announced that the bulk of the state's privatisation programme will be domestic, offering the bourse a guaranteed $50bn or so of promised listings over the next few years. 

The depressed international markets and the lack of enthusiasm for Russian stocks in general due to its poor investment image have meant selling Russian companies overseas has been heavy going. The Kremlin is also hoping the listing of some of Russia's biggest and most attractive companies at home will help the development of the domestic pension industry, which is simply absent at the moment, partly because there are only a few big liquid shares that suit a pension fund profile. 

At the same time, in line with strategy to boost interest in other state company stocks, the bourse has already promised to ramp up dividend payments. In its statement, Moscow exchange pledged to payout 30% of net profit for 2012, and boost that dividend to 50% for 2014. Perhaps on purpose, bids will be accepted until Valentines Day in what it is hoped will turn into a sweetheart deal. 

 

BNE

 

Comments: 0
Experts' Panel
Any advice to Trump?
All those who have contributed to the Trump - Pence "Make America...
Any advice to Trump?
Top
popular in the journal
Russian-UK Business Forum Notes...

Russian-UK Business Forum Notes...

LONDON (Sputnik) - Speakers at the fourth Russian-British Business forum held in London on 26 November agreed that trade between the two countries was showing a positive ...
US State Dept Takes Russia Off...

US State Dept Takes Russia Off...

WASHINGTON (Sputnik) - The Department of State has taken Russia off the list of countries where US visitors should "reconsider travel" to and now only recommends ...
Moscow Explains What\

Moscow Explains What\'s Behind US...

MOSCOW (Sputnik) - Regular US anti-Russian sanctions are routine, the Russian Foreign Ministry said in a statement on 21 November.
Ukraine-Russia Tensions Rise in...

Ukraine-Russia Tensions Rise in...

With an apparent nod from the U.S., the Ecumenical Patriarch’s ruling from Istanbul severed 1000-year ties between Moscow and the Orthodox church in Ukraine, raising ...
CIA Reportedly Dove Into \

CIA Reportedly Dove Into \'Panic...

Following the overwhelming backlash over the first full-fledged summit with Russian President Vladimir Putin in Helsinki in July, Donald Trump was said to have been ...