Russian Information Technology and Communications Minister Leonid Reiman

As I have said previously in my posts -- if you live in the UK, the U.S. or elsewhere, it is almost impossible to understand all of the rapid changes taking place in Russia, especially in the areas of business and financing. In the last two weeks I have communicated with almost 100 foreign investment companies and managed funds, but only a few of them decided to invest. Sun Tzu once said: "Opportunities multiply as they are seized". I guess it is often too difficult to seize something that appears to be out of your reach.

Leonid Reiman used today's photo opportunity to elaborate on the development of Russian IT sector. NTB news, Moscow's Business FM 87.5 radio station and several other Russian media outlets covered the launch of the MICEX IGC.

Russia's IT and Communications Minister deftly avoided one reporter's question about the privatization of SviazInvest during his remarks. Mr. Reiman also provided the journalists and finance professionals in the room with lots of interesting information on telecom and IT development in Russia and welcomed the inauguration of "the Russian NASDAQ". Reiman expressed his hope that someday the MICEX IGC will be a serious competitor to its American forerunner.

The FINAM and MICEX banner reads: "Investing in Russian companies"

Some companies from the Former Soviet Union (FSU) are already considering listing shares on the MICEX IGC index. This new instrument will enhance development of Russia's high-tech industries by utilizing the broad potential of the Russian stock market. This improvement will also promote more foreign investment in Russian equity markets. According to Mr. Reiman, in 2006 foreign investment in the Russian IT sector totaled 110 billion rubles (about $4.2 billion), and this year he expects even more.

The President of the MICEX, Alexander Potemkin, stressed the new opportunities for Small and Medium-sized Enterprises (SMEs) to list shares due to the new index. In the past, very few Russian SMEs seriously considered listing shares, and their options were limited to classic portfolio investments. But today, a new avenue for tapping the market is open. Moreover, the MICEX itself now has a new trading index in its portfolio to increase its profits.

Victor Remsha, the founding shareholder and General Director of the FINAM Investment Company noted that this is really a happy coincidence -- the establishment of a MICEX IGC sector (which has liberal listing requirements) during the same week as the launch of FINAM's Venture-IT Fund, which includes several quality Russian technology companies.

MICEX General Director Alexey Rybnikov explains the progress of the fund's trading

The General Director of the MICEX, Alexey Rybnikov, stressed that successful placement of the first issue on the IGC opens a new road to capitalization for Russian IT and telecom SMEs. By the end of 2007, about 10 companies are expected to be listed. Other technology sectors besides IT are welcome to list -- including biotechnology, precision machine tool manufacturers, semiconductors, etc.

Natalya Ivanova represented Renaissance Capitalat the MICEX event

Natalya Ivanova, Managing Director of Renaissance Capital's pre-IPO Fund, was also present for this historic occasion. The fund she manages is successfully investing in innovative and rapidly-growing companies. She told me, "This is indeed a historic event. Now Russian companies have a practical opportunity to look for investment domestically, not [just on the LSE] AIM or the NASDAQ."

If you are interested in learning more about the MICEX IGC or the FINAM Investment Company, please contact me at vladfk@finam.ru.

You can read the original post at Vladimir Kuznetsov's blog, Equity Financing in Russia. The views expressed in this post and on his blog are the personal opinions of Vladimir Kuznetsov, and are reproduced here solely for educational purposes. To read more Russia Blog posts about Russian capital markets, click on the finance section or type www.russiablog.org/finance in your web browser.