Russia, CIS companies pull 43 stock floats-PBN

MOSCOW, Oct 2 (Reuters) - As many as 43 companies in Russia and the former Soviet Union have cancelled stock floats this year and a short-term recovery in the IPO market is unlikely, consultancy PBN said in a survey on Thursday.

Capital raising activity in the region in the third quarter is half the level seen last year, and is now at its lowest level since 2004, PBN said.

"As Russia and the CIS have begun to feel the full effects of the global financial crisis, companies are postponing their offerings as they await more hospitable market conditions," PBN chairman and chief executive officer Peter Necarsulmer said in a statement.

"To date we know of 43 companies that postponed or pulled their flotations this year."

Initial public offerings by Russian and CIS companies thinned to a $2.7 million stock float by fertiliser maker Acron (AKRN.MM). The small offering effectively fulfilled the company's promise to investors to obtain a London listing.

Russian agribusiness firm Razgulay (GRAZ.MM) also made a $295 million secondary offering on July 21, before a sequence of events that sapped Russia's equity pipeline even before the worst effects of the global crisis made themselves felt.

Acron scaled back a much larger float in July when foreign portfolio investors started to dump their holdings in Russia, frightened by Prime Minister Vladimir Putin's attack on blue chip miner Mechel (MTL.N) over its coking coal pricing policy.

The government's efforts to smooth over the Mechel affair got lost in the clamour over Russia's brief war with Georgia and the subsequent spoiling of relations with the West, and mass capital outflows from emerging markets.

PBN said a recovery was now unlikely before global and domestic markets recovered liquidity and investor confidence.

The biggest IPO planned for this year's calendar, metals conglomerate Metalloinvest, will not proceed, its chief executive said on Thursday [ID:nL2194163].

One other long planned public offering, of shares in Russian language search engine Yandex, is not expected to take place this year, fund managers have said, although Yandex has not publicly renounced its plan.

"Although there are approximately 120 companies believed to be considering flotations in the next five years, this is very dependent on the ability of the global and domestic markets to recover their liquidity and investor confidence," Necarsulmer added. (Reporting by Melissa Akin; Editing by Paul Bolding)