Russian NASDAQ – Rolling Out or For Whom the Bell Tolls

THIS POST WAS ORIGINALLY PUBLISHED JUNE 14, 2007

Russian NASDAQ – Rolling Out or For Whom the Bell Tolls

Before the Bell

Today Minister for Information Technologies and Communications Leonid Reiman inaugurated the Innovation and Growing Companies (IGC) Sector of the MICEX

With the toll of the bell the trading of units of FINAM Venture-IT Fund commenced – and it was smashing success.

The Bell Has Tolled

Within 90 minutes all units of the Fund were sold for 501,000,000 RUR (about $ 20 million). The book was oversubscribed 10%.

In reality – for whom the bell tolled? For those investors that missed opportunity. ”Opportunities are never lost; someone will take the one you miss” – this well-known quotation was confirmed today, as Russian investors acted on the market. As I mentioned several times in my posts – if you live in London, USA or elsewhere, it is next to impossible to apprehend all Russian realities, especially in business and financing. In the last two weeks I dealt with about 100 foreign investment companies and funds, but a tad few of them did invest. Sun Tzu said: “Opportunities multiply as they are seized”. I guess, it is too laborious to seize something out of your reach.

Leonid Reiman used the opportunity to elaborate on the development of Russian IT sector. He tried to avoid the issues on privatization of SviazInvest, however, provided a lot of interesting information on telecom and IT. He welcomed inauguration of the “Russian NASDAQ” and expressed the hope that some time it will be a real competitor to its US original. Some companies from the Former Soviet Union (FSU) are already mulling listing at MICEX’s IGC Sector. This new instrument shall enhance development of Russian high-tech by utilization of diverse potential of the stock market. This is a prerequisite for emerging of new strategic foreign investors in the Russian market. The Minister informed that in 2006 foreign investments in IT sector totaled 110 billion RUR (about $ 4.2 billion), and this year he expects more.

Alexander Potyomkin, MICEX President, stressed that the new opportunity for Small and Medium Enterprises (SMEs) emerges today and it is really a breakthrough – SMEs were thinking about classic portfolio investments, and now a new way is open. Moreover, the MICEX itself acquires a new instrument that may increase its profits.
Victor Remsha, the founding shareholder and General Director of FINAM noted that it is really a happy coincidence – establishment of MICEX IGC Sector with somewhat lax listing rules, and maturing of the FINAM Venture-IT Fund that has quality Russian IT companies.
Alexey Rybnikov, MICEX General Director, stressed that successful placement of the first issuer in IGC Sector opens a new road for Russian IT and telecom SMEs – and by the end of this year about 10 companies are expected to be listed. The other sectors are welcome – biotechnology, high-tech companies of machine building, semiconductors, etc.

Natalya Ivanova, Managing Director of the Renaissance pre-IPO Fund, was at attention – the Fund that she manages successfully invested in innovative and growing companies. “It is indeed a historic happening. Now Russian companies have a practical opportunity to look for investments domestically, not on AIM or NASDAQ” – she told me.