Emerging markets to profit in 2-speed world-RenCap

By Douglas Busvine

MOSCOW, Oct 9 (Reuters) - Major emerging markets will benefit from global capital flows even if new financial crises afflict developed countries, the head of Russia's Renaissance Capital said on Tuesday.

"Capital markets are realising that we live in a two-speed world," Stephen Jennings, a New Zealander who founded the Moscow-based investment bank in the mid-1990s, told journalists.

More crises will follow the U.S. subprime mortgage meltdown, but their impact on growing emerging markets such as Russia will diminish over time, Jennings told a briefing held to present the new management team at Renaissance's consumer lending unit.

"The origins of the crisis are in developed markets. It's in the United States, at the big commercial banks. They have big liquidity issues, bigger than they are prepared to admit today," Jennings said.

The group's consumer lending arm Renaissance Credit has maintained its assets growth through the credit crunch, thanks to diversified sources of funding, which include wealthy Russian investors prepared to deposit cash with the retail lender, executives said.

"Our operations weren't hit ... because we had access to diversified funding sources," Jennings said, referring to four-year-old Renaissance Credit which aims to treble its loan book to between $1.5 billion and $1.6 billion this year.

MOMENTUM

Renaissance Capital has expanded its investment banking business across the ex-Soviet Union and is establishing a presence in sub-Saharan Africa.

Jennings said there was "too much momentum" for crises among the Group of Seven industrialised nations to derail emerging markets, which have rallied sharply since a correction in August and September.

MSCI's emerging markets stocks index .MSCIEF is up 38 percent in the year to date, but Russia .MIR0000PUS has lagged with a gain of 9 percent, as parliamentary and presidential elections in the months ahead weigh on investor sentiment.

"There's been a disconnect between the disruption we've had in credit markets and the relative stability in the equities markets," said Jennings.

"It's now clear that the equity market impact has been very limited -- equity markets have reopened very quickly."

Renaissance Capital was named on Tuesday as an organiser of initial public offerings of stock by Bank St Petersburg, a regional bank based in Russia's second city, and by electronics retailer M.Video.

Jennings said Renaissance had "a dozen or so" stock market offerings in the pipeline for this year which he said would raise billions of dollars.

"A lot of ideas about risk are going to be turned on their head," he said. "And investor appetite for Russia is going to be stronger than it was before the crisis."