RusEnergy

Jan. 24, 2006 Kommersant - Russia's companies or the companies with basic assets located in Russia accounted for nearly 28 percent of the size of IPO registered on LSE in 2005, KMPG said in the report released Monday, January 23, 2006. In size of the placed issues, the stock exchanges of Russia were the fourth in Europe, according to KMPG. The number of Russia's IPOs will remain high in the following few years with more and more funds to be raised through the national stock exchanges, the market players forecast. In its report, KPMG pointed to the growing share of companies, which choose the trading floors of Europe for their IPOs. The number of European IPOs climbed 40 percent past year, while their American counterparts suffered the 14 percent decline. In Europe, LSE was the obvious leader with the IPO size of ?8.53 billion. Nearly 28 percent of the amount was covered by Russian companies or the companies with the basic assets located in Russia. Moreover, Russia's AFK Sistema was the second past year in the size of the LSE IPO. Overall, nine companies of Russia carried out their IPOs on LSE in 2005, though they used to do it on NYSE. The analysts attribute such preference shift to high costs and extremely complicated procedures for entering the U.S. stock market. On the other hand, the amount placed by Russia's companies on the national stock exchanges is also going up with as much as €2.26 billion posted in 2005. Russia's market was already the fourth in Europe past year, having yet to catch up with the markets of Great Britain, France and Germany. "IPO number will rise on Russia's market next year. The market of Russia has proved its attractiveness and depth; more and more national companies get interested in placing exactly on domestic stock exchanges," said Andrey Burlinov, who is the executive manager at investment banking department at Troika Dialog.