November 21, 2019 / 2:55 PM / 15 days ago

Russian firms seen raising at least $10 billion from share sales in 2020: VTB Capital

MOSCOW (Reuters) - Russian companies are expected to raise more than $10 billion through equity listings over the next year, said the co-head of global banking at VTB Capital, a leading organizer of share sales in the country.

The projected figure is more than triple the roughly $3 billion raised by Russian companies through the sale of shares so far in 2019, according to Reuters estimates.

Initial and secondary public share offerings (IPOs and SPOs) are one measure of a country’s corporate and financial health and Russian listings are expected to gain momentum as economic growth recovers, the threat of new Western sanctions against Moscow subsides and the Russian stock market outperforms its peers.

“I think we’ll see a double-digit number of companies doing double-digit billion dollars of issuance in the next 12 months,” said Alexander Metherell, co-head of global banking at VTB Capital, the investment arm of Russia’s second biggest state bank VTB (VTBR.MM).

Russia posted its worst year for equity sales in a decade in 2018 with companies cancelling all their IPO plans as U.S. sanctions weighed and rises in U.S. interest rates made emerging market assets less attractive.

Speaking to Reuters on the sidelines of Russia’s annual economic forum hosted by VTB, Metherell said he also expected one or two equity issues - either primary or secondary — before the end of this year.

While declining to name specific companies, he said likely candidates were from Russia’s natural resources sector, as well as the consumer, food, retail and TMT sectors, the latter of which includes technology, media and telecom firms.

On Thursday, Gazprom (GAZP.MM), the world’s largest gas producer, said it was selling 3.6% of its shares, completing the sale of its so-called quasi-treasury shares, which do not benefit from dividend payments.

In 2019, Russian companies mostly held SPOs — the listing of new shares by a company which has already held an IPO —rather than initial offerings.

Metherell said the Russian stock market can post similar gains in 2020 to those seen in 2019, with demand stimulated by primary issuance and portfolio managers allocating more funds to emerging market assets.

The benchmark MOEX stock index has gained more than 24% .IMOEX, so far this year, outperforming the broader MSCI emerging market index .dMIEF00000PUS that has risen 9%.

Reporting by Andrey Ostroukh; Editing by Kirsten Donovan

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