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bne August 2024 Companies & Markets I 19
about 20 IPOs – both primary and secondary, when investors are offered additional blocks of shares,” the head of the
Sber broker, Aisha Kubezova, told Vedomosti. “We hope that the number of placements will grow, as will their volumes. Given the current market conditions, this is a win-win situation for all parties – on the one hand, investors receive new investment opportunities, which they are so in demand against the backdrop of problems with access to foreign markets, and companies have the opportunity to profitably locate at attractive levels and long-term money for business development.”
The peculiarity of the current placements, as well as the entire Russian stock market after February 2022, is the dominant role of retail investors, said Stanislav Sukhov, senior project leader at Frank RG. Institutional investors are not showing the same activity: demand from them is small, according to Sukhov.
Nevertheless, despite the sharp pick-up in listing activity, the overall volume of IPO in market capitalisation terms remains
bne:FX
Bulgaria is not ready for eurozone, say European Commission and ECB
bne IntelliNews
Bulgaria is not ready for entry to the eurozone in January 2025 as it does not meet the inflation criterion, the European Commission (EC) and the European Central Bank (ECB) said in convergence reports issued on June 26.
The decision was expected by the authorities in Sofia, which have said a new convergence report might be requested in
the autumn when the country should meet the last criterion. However, given the political instability and the slim chances of a regular government being formed in the current parliament, Bulgaria has little chance of joining the eurozone any time next year.
“In May 2024 the 12-month average rate of HICP inflation
in Bulgaria was 5.1%, i.e. well above the reference value of 3.3% for the criterion on price stability. This rate is expected to decrease gradually over the coming months, as pipeline
low and the free floats thin. Often the free float is not more than 5%, according to Sukhov.
Eight listing have taken place this year: the alcohol group Kristall, the vendor Diasoft, Carsharing Russia (Delimobil), the leasing company Evroplan, the microfinance organisation Zaimer, MTS Bank, the microelectronics manufacturer Element, and the developer of the videoconferencing service IVA.
However, the value of the IPOs has been increasing steadily as more companies come to market; the larger IPOs included Evroplan which raised RUB13.1bn ($152mn), and MTS Bank with RUB11.5bn. Both stocks have been stable since their listing and are trading at prices higher than their debut price.
While the majority of companies are listing on MOEX, two have chosen to list on the St Petersburg Currency Exchange (SPEB), which formerly specialised in foreign stocks but now focuses on sanctioned companies. These two were: the Element Group (created on the basis of the assets of Sistema and Rostec); and Svetofor Group (a driver training operator).
Given the political instability and the slim chances of a regular government being formed in the current parliament, Bulgaria has little chance of joining the eurozone any time next year.
pressures and supply bottlenecks continue to ease,” the ECB noted in its report.
It expects core inflation to remain persistently high, mainly due to strong wage pressures in the country where labour market remains tight.
“There are concerns about the sustainability of inflation convergence in Bulgaria over the longer term. The catching-up process is likely to result in positive inflation differentials vis-à-vis the euro area, since GDP per capita and price levels are still significantly lower in Bulgaria than in the euro area,” the ECB noted.
Meanwhile, Sofia needs to complete policy commitment set in 2020 when the country was accepted in the eurozone’s waiting room, the ERM II.
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