INTERVIEW: Finance Ministry sees no reason for listing on LSE

MOSCOW, Apr 14 (PRIME) -- The Finance Ministry sees no reason for Russian companies’ listing at the London Stock Exchange, but the government will not force them to list stocks in Moscow, Deputy Finance Minister Alexei Moiseyev said in an interview with PRIME on Friday.

The official said that many Russian issuers are listed at the Moscow Exchange and that he is sure the number will only rise.

“We can see an active listing process on the Moscow Exchange and it gains momentum. There was an advance in 2016, and we expect an even higher rise in 2017, a rise by dozens (of companies),” he said.

Moiseyev added that listing at the Moscow Exchange opens access to pension funds’ money.

“There is no reason in listing in London now. The client access terms are similar, but it is difficult to be in charge of two regulatory regimes. If a company wants its securities to be bought by Russian pension funds, it must trade in Russia. Our position is that each Russian company should be listed at the Moscow Exchange, but we are not going to force anybody,” he said.

The official said that Russia’s biggest companies may be able to issue termless bonds already in 2017. Now such bonds can be placed only by credit organizations.

PRIVATIZATION

The deputy minister also said that the government is considering privatizing Russian shipping company Sovcomflot via the stock exchange involving pension funds.

“I think there is nothing wrong with participation in privatization of Sovcomflot. Moreover, the central bank has eased requirements to pension funds’ investments. Now we discuss its listing at the Moscow Exchange and participation of pension funds in the IPO on market conditions,” he said.

The government also plans to privatize 20% in Novorossiysk Commercial Sea Port (NCSP) through the bourse to raise about 30 billion rubles in 2017, the official added. The funds will partially replace the 100 billion rubles from selling a 10.9% stake in VTB Bank, which is to go under the hammer after western sanctions are lifted.

“We expect privatization of NCSP this year on the open market. VTB Bank is unlikely to be privatized this year so the Federal State Property Management Agency has been authorized to find a replacement. One third (of the sum) will be replaced by NCSP, but the agency has not made any suggestions concerning the other two thirds yet. We planned to raise slightly over 100 billion rubles from VTB Bank’s privatization and now intend to get around 30 billion from selling 20% in NCSP,” he said.

Moiseyev said he sees no need for the central bank to sell its shareholding in the Moscow Exchange after the sanctions are lifted. On the contrary, he is sure this is an element of additional security for the system.

He added that Russia needs stricter regulations on the use of insider information on the securities market.

“The topic of much stricter regulations on inside information abuse is relatively new for us,” he said, adding that in other countries legislation in very severe and violators get real prison terms.

“If the financial market is not regulated… it will lead to inevitable cyclic crises… Fraud is a frequent thing on this country’s market. Tougher regulations is a global trend and the key task here is to protect consumer rights,” the official said.

Moiseyev also said that new requirements for the banks allowed to deal with state funds will start working before autumn. The ministry will permit banks having an A- or above national scale rating to operate with state funds without volume limits and banks with an A- to BBB- rating will have volume limits. There will also be capital requirements and a special regime for state-run banks and banks under the sanctions.

(56.6019 rubles – U.S. $1)

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