Russian companies eyeing HK IPOs
Updated: 2010-04-15 08:07
By Li Tao(HK Edition)
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Executives from Russian investment bank Uralsib Capital speak at a press briefing in Hong Kong Wednesday. More and more Russian companies are eyeing IPOs in Hong Kong since the world's largest aluminum maker United RUSAL Co took the initiative this January. Provided to China Daily |
Attracted by Hong Kong's role as one of the world's top markets for raising funds, a number of Russia-based companies are eyeing IPOs in the city, especially after the listing of the world's largest aluminum maker, Russia's United RUSAL Co, in the city this January.
Other leading firms from the country, such as Polyus Gold and Kamchatka Gold, are believed to be considering a listing in Hong Kong within the year.
However, Russian investment bank Uralsib Capital believes only companies with special appeal will be attractive to investors.
"I am not expecting to see more than 20 Russian companies listed in Hong Kong in the next few years. Domestic-oriented and non-Asia exposed Russian companies will find it difficult to raise money in Hong Kong due to the lack of recognition. But for those big names with global presence, it will definitely be attractive to Asian and international investors," said Oleg Lukhton, managing director from Russian investment bank Uralsib Capital in Hong Kong Wednesday.
He went on to explain the opportunities for Asian investors in the Russian market and the increasingly important role Hong Kong may play as a link between the economies of Asia and Russia.
"At this stage, the internationally renowned giants in Russia are primarily in the natural resource sector. The major sectors driving the country's growth over the decade, oil and gas, account for 66 percent of the value of Russia's exports, and almost half of the federal budget revenue comes from these sectors," said Lukhton.
John Parker, managing director of Uralsib Financial Corp, said most Russian companies raised capital from London and New York over the last few decades, but they are still relatively unknown to the Asian markets.
He nevertheless sees Hong Kong as the best venue for Russia to raise funds in Asia.
"Hong Kong's economy is so market-friendly that it poses no obstacle to new comers' adapting. We also have noticed the effort that authorities have made to sustain Hong Kong's attractiveness and that they are doing their best to promote the listings by international companies," said Parker.
"Hong Kong is no doubt the best option for Russia to attract funds in Asia," Parker added.
Parker said even if some Russian companies have already listed elsewhere, Hong Kong could still be attractive, as multiple listing in several financial centers is common for large enterprises.
Chris Weafer, chief strategist from Uralsib Capital said the Russian government has also set up structures to try and improve the country's investment image and to try and attract a larger volume of foreign direct investment.
"We note a great sense of urgency from the Russian government, which is doing its utmost to bring in money to help our country develop its economy," said Weafer.
Weafer said Moscow is keen to get close with Asia, and is carrying out new policies and redrafting regulations to attract investors to Russia, and to help the country develop industries, particularly those that have been neglected.
On its side, the Hong Kong government has already said it is keen to do more business with Russia.
At the opening ceremony of Russia's Capital Raising and Investment Summit in Hong Kong on Tuesday, Secretary for Financial Services and the Treasury, KC Chan said Hong Kong can serve as the financial gateway for Russian companies to reach the Asian market, and since there is strong potential for economic partnership between China and Russia, Hong Kong can undoubtedly serve as the bridge between the two countries.
"Earlier this year, we saw the first Russian company listed on our stock market, and I am confident that more foreign-based companies, including many more Russian companies, will be looking to list on the Hong Kong stock exchange in the near future," said Chan.
China Daily
(HK Edition 04/15/2010 page2)