Best year for Russian IPOs since 2011 signals return of bullish sentiment to country
As Bloomberg reports, the total number of equity sales is even higher, and including additional issuance, were about $6.5 billion this year.
“Russia looked more appealing with an easing cycle in place, a stabilizing economy and a solid ruble,” Julian Rimmer, an emerging markets trader at Investec Bank in London told Bloomberg.
According to the trader, Russian companies needed equity capital after Western sanctions imposed in 2014 “shut Russia out of capital markets for several years.”
The biggest sale was the IPO of Russian energy-related company En+ controlled by Oleg Deripaska. Out of the $1.5 billion raised $942.6 million was used to repay debt to state banks, and $500 million going to Deripaska's firm.
“The main reason why we saw an increase in additional equity sales this year was the shareholders’ desire to boost the liquidity of shares,” said Vladimir Vedeneev, chief investment officer at Raiffeisen Capital Asset Management in Moscow told Bloomberg.
“Considering the relatively stable oil price and absence of new geopolitical shocks, this trend will likely continue next year.”
With Brent oil trading up 12 percent this year, Russia is facing a bull market, which is “here to stay for another three to five years, triggering animal spirits in issuers and investors,” according to Vitaly Isakov, a money manager at Otkritie Asset Management.