8 of 92 Russian and CIS companies remain viable since their IPO

According to IPO Pioneers 4’s report that was released on Wednesday by The PBN Company, only 8 of 92 companies from Russia and the CIS finished the year with a higher market capitalization than at their time of listing because of the year that became disastrous for the capital markets.

As Chairman and CEO of The PBN Company Peter Necarsulmer said, current market conditions don’t seem to start re-generating before 2010.

The first ever IPO from the region, Vimpelcom, has created and retained the most value since its NYSE listing in 1996 – up 1,066%. The other 7 companies with an increase in market capitalization were Open Investments at 456%, Mobile TeleSystems at 407%, Lebedyansky at 93%, Wimm-Bill-Dann at 40%, Pyaterochka at 17%, Novorossiysk Commercial Sea Port at 14%, and Novatek at 6%. With the lowest level of IPO activity since 2004, 2008 certainly stands in stark contrast to 2007, which saw four different companies – PIK Group, ENRC, VTB and Sberbank – each increasemore capital individually than 2008’s combined total. 

Key report highlights:

• Only 7 CIS companies conducted IPOs in 2008, raising only $1.7bn, compared to 33 IPOs raising $34.3bn in 2007;

• A total of 48 companies withdrew their projected IPO plans due to market conditions;

• The combined market capitalization of consumer companies increased by 0.6% from listing to the end of 2008, compared to 53% decline for energy companies, 58% for mining and heavy industry, 74% for agriculture, 78% for banking & finance, and 91% for real estate;

• The combined market capitalization of Kazakh companies fell by 50%, compared to 60% for Russian companies and 70% for Ukrainian companies;

• For those companies that braved the market in 2008, 73% of funds were raised by listing either on the London Stock Exchange Main Market or Alternative investment Market. 

The PBN Company has identified lists over 125 Russian and CIS companies as considering initial flotations, subject to market conditions.