INTERVIEW: Gazprombank sees new IPOs, SPOs on Russian market in 2018

MOSCOW, Jun 13 (PRIME) – There will be initial public offerings (IPOs) and secondary public offerings (SPOs) in 2018 in Russia, Gazprombank First Vice President Denis Shulakov told PRIME in an interview published on June 10.

Market volatility caused by the April expansion of the anti-Russian sanctions resulted in delays of several announced stock market deals. “We see the start of the Russian economy recovery and the situation at the commodity markets is consistently favorable. This creates possibilities for issuers that plan IPOs to raise capitalizations after the placements,” he said.

He said that the stock market will grow after the debt market has recovered. “I think that the market will see new IPOs and SPOs this year despite the negative events connected with the sanctions. We see the next possibility to enter the stock market during the traditional autumn window from September until November,” he said.

Expansion of the sanctions also hurt the Russian debt market. “In these volatile circumstances, the Finance Ministry decided to cancel its weekly auction of ruble-denominated (OFZ) federal bonds, and issuers of several previously announced deals at the primary market of corporate bonds followed suit,” he said.

“Speaking of the international Eurobond market, we know at least four delayed placements, while the stock market was not an exception.”

There has been no chance for Russian issuers to offer bonds at the foreign markets since April, but the local market resumed operations after a short break. A low investment activity, accumulated liquidity, and the possibility to refinance liabilities at the internal market reduce local issuers’ appetite for new debt, they are ready to borrow only at comfortable rates, he said.

“In general, we expect the volume of corporate placement at the external market over the next several years to equal redemption of Eurobonds that were not hit by the sanctions against the issuers. Our estimates allow us to speak about the combined amount of possible issues of U.S. $12.5 billion in 2018 and $5.5 billion in 2019,” he said.

Placements on the local debt market in 2018 may exceed previous year’s figures.

“We estimate the investment capacity of the local debt market at 4 trillion rubles in 2018. Primary placements amounted to 3.2 trillion rubles last year, and we expect it to exceed 3.5 trillion rubles in 2018. I think that the debt market volume may reach 16 trillion rubles by 2020,” he said.

The Russian debt market is ready for foreign issuers to come, including sovereign borrowers, he added.

(62.3431 rubles – U.S. $1)

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