Director of Equity Financing, FINAM Investment Company, Moscow
In the last several years I have heard many requests for information about listing foreign companies in the Russian stock market. These requests have come from foreign holding companies for businesses operating in Russia and corporations with Russian assets. Some foreign holding companies were previously contemplating international offerings and listings, and wanted to capitalize on their brand name recognition in Russia by trading their stock in this country.
Now this oft-stated desire has finally become reality. A legal framework for the introduction of Russian Depositary Receipt (RDR) products came into effect in January 2007, but there were still several legal issues that prevented it from being implemented. This week the Russian Ministry of Justice registered three major regulations regarding RDRs and within a few weeks the final obstacle – defining listing rules and trading procedures – will be cleared.
A securities certificate from the MICEX
RDRs are very similar to American Depositary Receipts (ADRs) trading on the New York Stock Exchange and Global Depositary Receipts (GDRs) traded in European markets. The holder of an RDR would be entitled to receive dividends from a certain number of shares, as well as the right to redeem the value of shares (or convertible bonds) from the issuer.
This news has been enthusiastically welcomed by the market participants – all paperwork started back in 2005 and only now is it bearing fruit. It is expected that the first RDR listings may take place as early as September-October this year. There is already an initial candidate for listing RDRs - X5 Retail Group (LON:FIVE). Several other companies have already announced their plans to list RDRs – including Evraz Group (LON:EVR), Integra Group, Euroset, and IMSG (SEA:IMSG). Both major Russian stock exchanges – the Moscow Interbank Exchange (MICEX) and the Russian Trading System (RTS) are now in the process of amending their regulations to accommodate this new opportunity. The FINAM Investment Company is ready to provide this service to foreign companies.
Before the rush begins – come to Russia and list now!
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.
