Russia had a bumper year for initial public offerings (IPOs) in 2007 and there is every sign that the express is going to accelerate this year. Russian companies raised a whopping $27bn in 2007, of which floats by Russia’s two leading state banks accounted for $17bn. However, this year is the turn of the commercial banks and they are being joined by an increasing number of companies from all the sectors of the economy as owners start to tap their equity as a source of financing.
Despite the record crop of IPOs last year, analysts are expecting this year to be even better, partly because the huge volume of shares depressed growth of the domestic bourse. While other emerging markets’ stock markets soared in the first half of 2007, Russia’s market took in only $5bn of fresh money. Existing investors sold shares to buy the two banks’ issues and the leading RTS index was more or less flat as it struggled to absorb the two huge issues.
