EBRD, Kremlin Investment Fund Buy Stakes in Micex-RTS Bourse
The European Bank for Reconstruction and Development and the Kremlin-backed Russian Direct Investment Fund agreed to buy 6.29 percent and 1.25 percent stakes in the Micex-RTS exchange, respectively, according to a joint statement e-mailed by the EBRD.
The EBRD was frustrated in its bid two years ago to buy a 10 percent stake in RTS for $75 million. The Federal Financial Markets Service and the FSB, the main successor to the Soviet- era KGB, wrote to Prime Minister Vladimir Putin requesting legislation that would oblige foreign companies to seek approval for stakes above 5 percent in key financial assets, Vedomosti reported Sept. 30.
“The turmoil in the world economy gives added urgency to the need to strengthen and deepen Russia’s capital markets so that they can provide the liquidity which the domestic economy needs,” Varel Freeman, a first vice-president at EBRD, said in an e-mailed statement.
The government is courting Western investors to help transform Moscow into a global financial center. Goldman Sachs Group Inc. and Citigroup Inc. are two of 23 banks helping Russia manage its $34 billion privatization program over three years and Goldman Sachs’s CEO Lloyd Blankfein and Citigroup’s CEO Vikram Pandit are among 27 executives named to a board advising the Kremlin on how to turn Moscow into a financial center to rival London and New York.
Terms of today’s deal were not disclosed. Russia’s Direct Investment fund was set up in June to invest in modernizing industries and help wean the economy off its dependence on energy exports, which account for 17 percent of gross domestic product. The investment in the exchange is its first ever investment, the statement added.
To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net
To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net
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