Russia Tops European IPO League For 2007
PBN Releases Its Annual Scorecard on 33 Russian, Ukrainian and
LONDON & MOSCOW, KYIV, Ukraine & ALMATY, Kazakhstan--(BUSINESS WIRE)--February 26, 2008 In 2007 Russian companies raised more money in initial public offerings (IPOs) than companies from any other European country, according to IPO Pioneers 3, a report released today by The PBN Company, the strategic and financial communications consultancy.
Russian companies raised a total of $29.4bn during the year. This outstrips companies from the UK, which raised $22.bn (GBP 11.3bn), followed by Germany ($11bn), with Italy ($5.8bn) and France ($4.9bn) trailing well behind. Overall 2007 was another record year for Russian, Ukrainian and Kazakh IPOs in spite of the global market downturn, the report shows.
"In 2007 Russian companies demonstrated that they are now true global players in the equity capital markets. This performance underlines the convergence between fast growing developing markets and the more mature economies," said Peter B. Necarsulmer, Chairman & CEO of The PBN Company. "They also showed that they are sufficiently developed to withstand global market tremors, and are therefore a relatively safe haven for international investors seeking new high-growth opportunities - something few would have believed possible just a couple of years ago.
"Another sure sign of the growing maturity of CIS markets is that, whereas before IPOs were about oligarchs cashing out, now over 80% of funds raised are reinvested in the businesses," continued Necarsulmer.
The report profiles all the year's IPOs from Russia and the Commonwealth of Independent States (CIS), which together raised $34.3bn. Key highlights from the report reveal:
-- Russia's Sberbank and VTB were the world's largest floats in
2007, raising $8.8 billion and $8 billion respectively.
-- Acceleration in number of CIS floats to 33 - compared with 23
in 2006 and 16 in 2005.
-- Average deal size of over $1 billion - compared with $917
million in 2006 and $380 million in 2005. In contrast, UK
issues on the London Stock Exchange averaged $127 million.
-- Growing resilience of region - 12 CIS companies went to market
after onset of the global liquidity crisis in August, raising
$8 billion, or 23% of the total amount raised in 2007. This is
24% more than was raised in the entire 10-year period from
Vimpelcom's first issue in 1996 through the end of 2005.
-- Dominance of financial sector with 52% of all funds raised.
Real estate offerings were also prominent, up 731% y-o-y, with
flotations from resources and mining down to only 15% of funds
raised from 56% in 2005-6.
-- Companies which listed on local exchanges outperformed those
which listed abroad - the combined market capitalization of
Russia-only listings was up 16% compared to London's AIM and
Main Market, with combined market capitalization of all CIS
companies to list finishing down 1% and 5%, respectively.
-- 81% of all funds raised last year were reinvested into the
business - compared to only 35% in 2006 and 46% in 2005,
demonstrating that CIS IPOs are no longer synonymous with
exits and cash-outs by founding shareholders.
"It is not just about Russia. Ukraine was the second best performing stock market in the world in 2007 after China and began 2008 showing remarkable resistance to global market volatility," said Necarsulmer. "Kazakhstan, which raised $3.8 billion in 2007, will undoubtedly continue to become an increasingly important equity play over the coming year."
Looking ahead, 2008 should see the rise of companies from fast-growing and politically important sectors in Russia such as infrastructure, engineering, technology and agriculture, which are top of the Russian government's agenda.
The PBN Company has identified over 85 Russian & CIS companies that are believed to be considering initial flotations in the next 3 years.
IPO Pioneers 3: Featuring Russian, Ukrainian and Kazakh Offerings reviews all 33 CIS IPOs in 2007, complete with listing data and offering trends. It is the third volume of The PBN Company's IPO Pioneers series of research products, which is available at www.pbnco.com.
The report includes analyses of the following IPOs:
AFI Development (AFID)
Aisi Realty (AISI)
Alliance Bank (ALLB)
Bank Saint-Petersburg (STBK)
Chagala Group (CHGG)
Eurasia Drilling (EDCL)
Eurasia Natural Resources Corp (ENRC)
Kazakhstan Kagazy (KAG)
KDD Group (KDDG)
Kernel Holding (KERN)
LSR Group (LSRG)
Magnitogorsk Iron & Steel Works (MMK)
Novorossiysk Commercial Seaport (NCSP)
PIK Group (PIKK)
Volga Gas (VGAS)
About The PBN Company (www.pbnco.com)
The PBN Company is the leading strategic and financial communications consultancy with a focus on emerging markets. The company has offices in London, Moscow, Kyiv, Riga, Almaty, Sochi and Washington DC. In 2007 the PBN Company advised on the IPOs of Bank Saint-Petersburg, Ferrexpo, M.video and MMK.
PBN's clients in the region include Alliance Bank, Arcelor Mittal, Baltic Beverages Holdings, Bank Saint-Petersburg, Basic Element, BP, Citigroup, Dragon Capital, Enel, Ferrexpo, Horizon Capital, Knight Frank, Merrill Lynch, Motorola, M.video, Nordstream, Pepsi, Pharmacy Chain 36.6, PricewaterhouseCoopers, Renaissance Group, Rolf Group of Companies, Rosneft, Sberbank, Sony Pictures, Telenor and UkrEximBank.
In 2007 PBN was named Eastern Europe Consultancy of the Year by The Holmes Report and became a member of the WPP group of companies.
CONTACT: The PBN Company Washington DC Paul Nathanson, +1 202-466-6210 email@example.com