Page 110 - Russia OUTLOOK 2024

No large IPOs are expected on the Moscow Exchange in 2024, head of the supervisory board Sergei Shvetsov told news outlet Frank Media on November 27.
"No, there are some isolated IPOs, this behaviour is linked with the supply deficit. The chains of leading companies to an IPO have been broken,” Shvetsov said.
“Demand exceeds supply now. By the way, the list of those wishing to float their shares next year is not bad... No, no placements of the scale of Ozon are planned so far." The executive did not disclose the list of companies preparing for placement. He said that the majority of companies want to become public in order to be able to scale up the business.
Foreign investors have left the Moscow stock market. The economic sanctions imposed as a result of the war of aggression started by Russia in March 2022 have changed the Russian financial market in many ways. One key change is the exit of foreign investors. Before the war, foreign investors (mainly large Western funds) accounted for about half of the trading on the Moscow Stock Exchange (MOEX) and about 20% of the government bond market. Sanctions imposed by Western countries and Russia's own measures to limit the sale of securities have practically expelled all foreign portfolio investors.
The consequences are visible in the market. Since there are hardly any large domestic institutional investors in Russia, the share of private individuals in trading on the Moscow Stock Exchange has been around 80% since the outbreak of the war. The volume of trading decreased sharply in spring 2022; at the end of last year the average daily turnover was only about RUB30bn. This year, the good salary development and the gradual adaptation to the new reality have increased interest in stock investing. The average daily turnover has risen by about half compared to last year, but the volume of trading is still lower than the pre-war level. The exceptionally large share of private individuals makes trading difficult to predict.
Fewer changes in the bond market
Trading in the corporate and government bond market has been smaller than the stock market. In the bond market, domestic commercial banks are significant market participants; correspondingly the share of foreign investors was smaller even before the war. About 9% of the banking sector's balance sheet is in government bonds and about 5% in other bonds. As a whole, the proportions have hardly changed during the war, but bank-specific information on the main items of the balance sheet is no longer available.
In total, about half of the ruble-denominated bonds in circulation are government debt, the other half is roughly equally divided between bonds of financial institutions and other companies. In the current year, fewer new government bonds have been issued than planned in the budget, as instead there have been plenty of companies and especially financial institutions. October saw an exceptional spike in trading as companies sought to benefit
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