RUSSIAN AIM – More news on first of them – RTS START

THIS POST WAS ORIGINALLY PUBLISHED FEBRUARY 19, 2007
  

Today the RTS (the second largest Russian stock exchange) hosted a press conference in Moscow that was centered on its new “Russian AIM” effort – RTS START. Surprisingly a big number of people showed up – more than 100, however, as it is a usual thing – the majority was the financial consultants and other players of the market.
As it is the rule - the RTS was very good with the abundance of quality information that was really showered on the participants.
A very interesting report was presented by General Director of the INTERFAX business services outfit – he made a thorough overview of the world alternative investment markets (though it seemed like a latent advertising of Thomson Financial services). That was really cognitive for the most attendees – besides well known LSE AIM, TSX, etc – there are 27 stock exchanges that service mid-cap companies. Though – the good question is the criteria for mid-caps – the ones for Russia are indeed different. There are more than 7,000 listed companies at the alternative markets, but only 4% of them prefer to list outside their domiciled countries. Thus, the conclusion was, that generally speaking, in domestic markets the trading is 10 times up then in foreign. The INTERFAX raised, as I see, one of the most intriguing parameter regarding the alternatives: a number of investors per one listed company: USA – 1.4, U.K – 1.2, the biggest is Belgium – 2.5; while the average is 1.3. This is extremely interesting – somehow Russia was out of the list. I guess, we will witness numbers for Russia in the nearest future? One of the summarizing thoughts was – that as the rule on the alternative markets the number of investors basically equals the number of listed companies.

Extremely captivating was the report of Vice President of the RTS – “The Myths of IPO”. That was by far the best information digest on the IPO history in Russia with quality analysis. Although there were some amusing remarks (like “because of decrease of numbers of foreign listings worldwide, it is a must to have IPO in Russian domestic market”), I was really impressed with analysis. That gave a detailed breakdown of all Russian IPOs both domestic and foreign, even with the per cent of the shareholders capital – with maximum raised by ROSNEFT to minimum by AMUR MINERALS ($ 7.124M). Although the perspective estimates were basically the same as everywhere (UFG’s and Citigroup’s reports), but still it was confirmed that the RTS thinks that about 30 IPOs will be made in 2007. Of course, UFG’s number of potential 500-600 candidates makes the impression. The RTS also thinks that the number of “popular IPOs” will increase; though many people are still wondering about the term (esp. as it was announced today that Sberbank’s share will be sold at $3,160 apiece) and the possibilities of average Russian to buy at least ONE share.

As the whole the press conference made an exceptionally good impression with the follow up discussions during buffet entertainment. After some small talk with a couple of attendees we made the following summary - due to the great desire of “cash-out” the foreign listed IPOs will be present, but now we see a good change in the environment with RTS START and with (still awaiting to be announced) MICEX counterpart.