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Interview by Alex Metherell, Co-Head of Global Banking at VTB Capital, for Reuters

25 October 2017

Moscow may host up to 12 share listings in 2018 - VTB Capital

Moscow may host up to 12 initial and secondary public offerings in 2018 and various unnamed firms are actively considering raising capital via there next year, VTB Capital's co-head of global banking said.

Russian firms have flocked to London and New York stock markets in the past to raise their profile and tap these deep capital markets, but are now more open to home listings partly because of a recovery in the country's economy.

After two years of contraction, the oil-dependent economy is expected to grow by around 2 percent, the central bank has predicted.

Alexander Metherell, in charge of global banking at an investment arm of Russia's second biggest state bank VTB, said there could be three or four IPOs and five to eight SPOs next year.

"I think you'll see two or three on the consumer-retail side and you'll definitely see a couple on the mining side, maybe also in the transport and infrastructure sectors," Metherell said in an interview with Reuters.

Listings could take place as soon as companies published their year-end results and audited them, he said.

"If people are really quick, you may see something coming out in April, but it's more likely to be in the second quarter rather than in the first quarter," Metherell said.

With the Russian economy showing signs of recovery and foreign investors making a cautious return despite Western sanctions over the Ukraine conflict, several Russian companies have listed in Moscow this year.

Moscow has hosted an IPO by children's goods retailer Detsky Mir <DSKY.MM> and shoe retailer Obuv Rossii <OBUV.MM>. It also held SPOs by pipemaker TMK <TRMK.MM> and fertiliser company Phosagro <PHOR.MM>.

Obuv Rossii last week raised around $105 million, while Russia's En+ Group, which manages tycoon Oleg Deripaska's aluminium and hydropower businesses, aims to raise a total of $1.5 billion via sale of new and existing shares.

Also, introduction of new settlement systems and a central securities depository on the Moscow Exchange has helped to reduce risks for market participants and increased overall transparency.

This year had been "a turning point in terms of investors saying they wanted to have greater exposure to Russian assets," including Russian shares and bonds, Metherell said.

"In terms of sentiment, this year has really seen a marked increase in capital raising for the corporates on both the debt and equity security sides, which has been very positively received by the market."

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