Moscow Exchange Head notes higher interest in IPO on Russian market

There is increasing interest in initial public offerings (IPOs) on the Russian investment market, said Yuri Denisov, CEO of Moscow Exchange at VTB Capital’s “RUSSIA CALLING!” investment forum. The broadcast is available at RBC website.

Denisov said that over 2020–2021 the total volume of IPOs and SPOs amounted to more than RUB 650 billion. He added that this year there have been six initial public offerings this year, and three of these took place in a Russian platform.

The head of Moscow Exchange noted that these dynamics are caused by a major role of retail investors coming to the investment market and creating additional liquidity. “From 10% to 30% of IPOs are covered by them [retail investors]», — he underlined.

Denisov said that Moscow Exchange is currently in talks with about 30–40 companies that are planning to conduct an IPO shortly. He pointed out that these are businesses that have been established over the latest ten years, particularly, “new economy” businesses, tech companies.

Denisov stressed that it is very important in terms of diversification of the Moscow Exchange Index, since it increases the share of Russian free-float equities and market liquidity. The head of Moscow Exchange added that the share of the non-resource sector in the index has grown from 32% to 42% since 2019.

Denisov noted that the market is changing in terms of diversification as well, there are emerging opportunities for diversified investment: construction companies, IT companies are going public, there are issuers from the healthcare sector. This enables investors to use various strategies, increases depth of the market. Moreover, these market changes provide opportunities to launch new exchange traded funds and potentially release derivatives for new indices.

Previously Yuri Soloviev, Chairman of VTB Capital Board, VTB First Deputy President and Chairman of the Management Board, said that if favorable market conditions in Russia persist, in 2022 the number of expected IPOs of Russian companies could at least match this year’s number. According to him, in 2021 there have already been 22 offerings — seven IPOs and 15 SPOs.