IPO on the Moscow stock exchange: why is it not so interesting for companies?
The year 2018 was marked by the complete absence of initial public offering of shares (IPO) at the well-known Russian platform. The reasons are clear: the instability of the markets and the possibility of falling into the sanction lists.
Therefore, companies are in no hurry to disclose corporate information. And some of them even left the Moscow Exchange. In particular, AvtoVAZ and Dixy shares no longer bargain in the capital.
So, in 2017-2018, a sufficient number of Russian organizations got into the sanctions lists. And this gave a corresponding signal to the market. Publicity is a threat to the company and threatens with sanctions not only for the company itself, but also against its top managers and beneficiaries. As well as various collaborates: from suppliers and customers to banking structures. Economic constraints lead to the collapse of the company’s capitalization. When US Rusal was listed on the US Treasury Department, its quotes fell by 50%.
If a certain index is calculated taking into account the data of the sanction company, it hurts the performance of the market as a whole.
Small IPOs on the Moscow Stock Exchange and an acute shortage of candidates
Placements of small firms traditionally attract such investors.
The capitalization of small companies has decreased, and some have delisted from the site. If anchor investors are found, firms are often satisfied with Private Placement. For example, Mail.ru holding acquired a stake in ESforce for $ 100 million (e-sports industry).
Large corporations realistically assess the potential of the Russian markets and try to make placements abroad. Investors want securities to be placed on the usual – American and European sites. It is true; there were examples and parallel arrangements.
Meanwhile, the era of the IPO is passing. When analyzing the stock chart (ETF), one can note that 82% of it are American companies that have recently entered public markets.
The ETF rose 20% from 2014 to 2016, and then it fell 25 percent. In 2018, the fund lost more than 30% of capitalization.
The reduction in the initial public offerings of shares was also influenced by the correction in the value of Bitcoin.
Despite the fact that IPOs are outdated, you can pay attention to the peculiarities of the American markets. Funds raising issuers show growth of Key indicators. In Russia, the majority of organizations that conducted an IPO cannot boast of serious success.
Analysts predict an increase in IPO with the deterioration of the situation with private placements. If attracting funds will not succeed in the “usual” way, companies will have nothing to do, how to conduct an IPO, and at the same time improve management and its corporate structure.
Provided that the stock market stops falling, in 2019 several IPOs should be expected on the Moscow Stock Exchange.
