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54 I Eastern Europe bne February 2018
Yuri Prilipov MD, Head of Investment Banking, BCS Global Markets I Alexey Kletenkov, Director Head of Equity Capital Markets, BCS Global Markets
VOX: The pipeline of Russian IPOs
and SPOs for 2018 is filling up
Russia’s equity market is coming back to life as the economy recovers and investors start to relieve their pent up demand for exposure to high yielding growth stories.
The leading dollar denominated Russia Trading System (RTS) index was up by half in 2016 and while it was essentially flat in 2017 a string of IPOs and SPOs came to a willing market, starting with Russian children’s toy retailer Detsky Mir, the second-largest IPO in three years. Detsky Mir sold one-third of its shares for RUB21.1bn (€333mn) on Russia’s Moscow Exchange (Moex). The pipeline is now filling up for this year, as mid-cap companies operating in non-political sectors like retail and transport are hoping to tap the market for investment capital.
Leading Russian brokerage and invest- ment bank BCS GM has been intimately
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Ben Aris in Moscow
involved in the process, organising its two debut IPOs, the flotation of shoe retail chain Obuv Rossii and mid-cap transport company Globaltruck in October last year. I sat down with Yuri Prilipov, BCS GM’s head of investment banking, and Alexey Kletenkov, the head of equity capital markets, to talk about the stock market outlook for 2018.
Ben Aris: Russia’s market returned 52% in 2016 and while the index was more or less flat in 2017 there was a whole string of IPOs and SPOs. What is 2018 looking like?
Yuri Prilipov: We have seen a very good year. For the last few years the market
was almost closed due to political events and the decline in the oil price. But 2017 was very good in terms of the number
of transactions. There were four to five IPOs out of Russia last year that started with Detsky Mir and that continues to be encouraging. We did two transactions, which were debut deals for BCS GM: Globaltruck and Obuv Rossii.
BA: This was a change in pace for Russia, as in the past there have been some extremely big IPOs like Rosneft and Sistema that mostly happened
in London. However, the deals
being done now are mid-cap sized companies and are being listed on the Russian exchange.