Page 89 - RusRPTFeb19

8.3 Stock market
8.3.1 Equity market dynamics
Morgan Stanley will be shutting down its equities, currency, and trading operations in Moscow, becoming the latest foreign bank to reduce its presence in Russia, Bloomberg reported on December 13 citing unknown sources.Reportedly, the bank plans to move some employees to London, while cutting other positions. The bank has about 40 people on the sales and trading desks in Moscow, with remaining local staff focused on corporate finance, capital markets and mergers and acquisitions.
Russia's venture capital market is expected to decuple in size to RUB2.7 trillion ($40bn) by 2030, according to the joint strategy of the Russian Venture Company (RVC) and the Ministry of Economic Development, Vedomosti daily said on December 19.
Achieving the ambitious goal would mean increasing the capitalisation of Russian VC funds 10-fold from 2017. The total amount of VC deals would have to jump 25-fold from RUB16.2bn to RUB410bn in 2030, according to the plan.
The RVC plans to bring corporate investors to the VC market, as well as the
non-state pension funds (NPFs) that are currently being reformed and re- consolidated. These should become the anchor VC investors with 45% share by 2030. Together with tax rebates and state support this would add RUB960bn to the VC market by 2030. Private investors would bring up to RUB950bn.
The discrepancy between investing the "safe" pension money into risky VC projects will be reconciled by special regulations that would allow NPFs to participate in investment agreements and funds.
Number of projects competing for VC funding would also have to increase dramatically, 2-2.5-fold y/y to 40,000. The think-tanks and experts participating in the drafting of the strategy see this as realistic given current statistics on such parameters as tech graduates and new start-ups.
The Russian Ministry of Finance has found an alternative exchange to list sanctioned shares of Russians companies on the US Treasury Department (USTD) US Specially Designated Nationals And Blocked Persons List (SDN List), Deputy Finance Minister Alexei Moisseev told reporters on the sidelines of the Gaidar Forum Vedomosti reported on January 16.
“Yes, they decided, but they are not yet ready to publicize the decision year,” Moisseev said.
The need for a new venue to list the shares is a result of Moscow Exchange (MOEX) decision not to work with companies on the SDN list. Following Russia’s capital markets revolution in 2011 that hooked the exchange into the international settlement and clearance systems of Euroclear and Clearstream international investors have direct access to the stock and bonds listed on MOEX. That has improved liquidity and the share of foreign investors in Russia assets has increased as a result, especially the share of investors into the domestic treasury bills, or OFZ.
However, that has exposed MOEX to punishment by the US if it ignores US sanctions and includes the sanctioned companies on the exchange. MOEX has been transformed and it itself one of Russia’s best performing stocks. The management are wholly focused on building up their business and operate largely independently from the Kremlin as it tries to grow Russia’s young but large and liquid capital market.
China has taken a similar stance and surprised observers when Chinese
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