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bne December 2021 Companies & Markets I 21
beginning of this year. “Last year the volume of money that went into stocks was greater than the amount of money withdrawn from bank deposits,” Goryunov said. “That means not only are the people changing the way they invest their wealth, but stocks are also tapping into a new pool of money that has never been in the banking system.”
For Alexandr Diakovskiy, this focus on retail investors has been key to SPB Exchange’s success to date, and the SPB100 index is the logical next step. “When we first started thinking about what the new index should be, it occurred to us that any index is a reflection of the bourse’s strategy and of its role on the market and in the economy. For us, it was important
to convey two things: firstly, the SPB Exchange’s unique ability to provide liquidity in global stocks in a specific time zone. And secondly, the SPB Exchange’s enduring focus on retail investors,” Diakovskiy told stakeholders in the launch presentation.
Russia’s venture capital market is booming, fuelled by a run of billion dollar IPOs
Ben Aris in Berlin
Russia’s venture capital market is booming as entrepreneurs and business hope to cash in on the international appetite for the rapidly expanding tech sector.
Dsight, a Moscow-based business intelligence company with a focus on investment, has just released the English version of its Russian venture report covering the first half of 2021, reports East-West Digital News (EWDN).
In contrast with last year’s disappointing numbers, the market showed signs of renewed growth earlier this year, with total deal value exceeding $1bn for the first semester.
This is an all-time record, notes Dsight: “Over the last few months we have been watching the Russian market grow continuously, and cruise along to Europe’s top 10 venture regions,” writes the agency’s founder, Arseny Dabbakh.
The stars have aligned to make Russia’s tech sector one of the most dynamic in the world. Russian e-commerce was already booming before the coronacrisis hit, but the pandemic has only served to catalyse the already rapid growth in online retail, which is growing about five times faster than the
real economy.
Indeed, countless stories have emerged this year that testify to the increasing influence of retail investors on the performance of stock markets. The popularity of GameStop is a particularly vivid example, although perhaps not an entirely representative one. The SPB Exchange claims to be particularly well positioned to assess the development of the retail investing boom, given that somewhere in the region of 99% of its transactions come from retail investors. For Diakovskiy, the momentum achieved by retail investors coming to the market is “the trend of the decade.”
The bourse will hope that its new index continues to fare as well as it has in the past year, when the profitability of SBP100 was more than 50%, comfortably beating the performance of Russian and international equity indices. The SBP Exchange
is expected to hold an IPO this year, and a report by business newspaper Kommersant suggests the bourse could be valued at up to $2.5bn.
The leading retail players were already investing into their online offering, but the traditional bricks and mortar retailers are now increasingly facing competition from the largest e-commerce players like Yandex, Ozon and Wildberries, which this year became Russia’s largest retailer of any kind and is taking on the established market leaders like children's good chain Detsky Mir at their own game. At the same time, Russia’s leading banks are snapping up online ventures in a quest to build complete ecosystems that cater to the gamut of customers' lifestyle needs.
Russia’s retail banking behemoth went as far as to drop the word “bank” from its name and is now rebranded simply as Sber. The competition between all these players has led to an explosion of M&A activity, with startups able to sell to one of the vying incumbents at valuations in the tens and hundreds of millions of dollars.
M&A has also been growing fast, although the after-effects of the start of the pandemic last year weighed on M&A activity
in the first half of this year, with the rate of growth in the number of deals slowing somewhat from previous years. The total value of transactions in January-June was up by 16.5% to $17.17bn from $14.74bn a year earlier, according to law firm
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