Sova Capital sees increase in small and mid-cap IPOs on Russian markets

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New report describes historical and future development of Russian stock markets

LONDON – (BUSINESS WIRE) – Sova Capital, the London-based brokerage firm in emerging markets, anticipates an abundance of investment from small and mid-cap issuers in the coming years, as discussed in the detailed report of ‘today analyzing the past, present and future of Russian Equity Markets (ECM).

Alina Sychova, Head of Capital Markets Origination at Sova Capital, comments:

“Although some large industrial companies – such as SIBUR and Metalloinvest – have yet to be listed on the stock exchange, the Russian ECM market will continue to thrive before and after these companies are listed. Larger transactions have been accelerated by the global push towards e-commerce and digitization over the past two years, and smaller issuers will be driven by that same continued momentum. ”

As well as providing a comprehensive overview of the history of Russian ECM, the report – authored by Alina Sychova and Georgy Lolaev – describes how the infrastructure of the Russian domestic market continues to evolve and mature. 2021 marks the first year since 2007, when IPOs accounted for more than half of total ECM issuance and momentum is expected to continue through 2022, with as many as a dozen Russian companies taking would have applied for public status.

Russian companies have raised nearly $ 4 billion in IPOs in 2021 with listings on the Moscow Stock Exchange (MOEX), the London Stock Exchange (LSE) and in the United States. Continuing a trend of recent years, all Russian IPOs this year have had a Moscow component, with many listings only on MOEX. While the majority of IPOs before 2015 took place outside of Russia, since 2016 50% of all listings have been MOEX only.

Other key findings from the white paper include:

  • Although Russian ECMs tend to be cautious about adopting new equity instruments, entrepreneurs have shown considerable interest in PSPCs, creating a unique opportunity for investors.

  • The expected growth of small issuers in the Russian ECM will require a different approach to executing transactions with an increased focus on investor education and a considerable allocation of human resources to effectively communicate the issuer’s investment case.

  • The geopolitical events of 2000 and 2020 both attracted retail investors to the capital markets, and in the short term, the current influx will generate valuable additional demand in ECM transactions, however, inflation will ultimately determine the long-term impact of retail investors on ECM

The full report is available on the Sova Capital website: https://sovacapital.com/sova-capital-the-view/

To set up interviews with Sova Capital or obtain additional feedback, please contact EM at [email protected]

Valery lee

[email protected]

+7 916 945-58-75

Source: Sova Capital

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