CEE Equity

Kazakhstan’s privatisation programme is set to continue, despite the decision of its president Nursultan Nazarbayev to step down from that position on Tuesday, according to ECM bankers and investors.

A flurry of Russian equity capital markets transactions have hit the market in the past fortnight, with three block trades priced and one IPO launched. After almost no Russian issuance since April 2018, many investors are keen to gain exposure to the country and sellers are taking advantage of a clear window before political volatility returns.

Roman Abramovich let a consortium of three Russia oligarchs in a £151m selldown of shares in Evraz, the London-listed Russian steel and mining company on Monday night.

An uptick in Russian equity capital markets (ECM) activity this week buoyed bankers and investors, who are hoping a freeze caused by US sanctions is thawing, write Sam Kerr and Aidan Gregory.

Oleg Tinkoff sold $150m worth of London-listed Global Depository Receipts in TCS Group Holding on, the Russian financial services company that controls Tinkoff Bank on Tuesday night.

Investors were so enthused by an offering in Norilsk Nickel, the Russian nickel and palladium mining and smelting company, on Tuesday night that bookrunners increased the sale to $550m, and the stock has continued to perform well in trading.

Russian equity capital markets issuance is likely to return soon, potentially in the first quarter, as issuers and bankers in the country prepare to sell stakes in publicly listed Russian companies through accelerated bookbuilds.

Russian president Vladimir Putin’s suggestion that he will extend the country’s capital amnesty by a year is good news for the country’s capital markets and a step forward in making the country less dependent on international, and primarily western, investors.

DWF, the UK law firm, has filed paperwork on an initial public offering in London, but many in equity capital markets are predicting that the the city’s largest deals will come from the emerging markets.

The US Treasury has lifted sanctions on Rusal and EN+, the aluminium and energy companies formerly controlled by Russian oligarch Oleg Deripaska, but the fear of further sanctions against Russian companies remains.

The US Senate on Wednesday rejected legislation that would keep sanctions on companies linked to Russian oligarch Oleg Deripaska, including aluminium firm and bond issuer Rusal and London-listed energy company En+. Although many investors and bankers are hailing this as a victory for Russia that could reopen the international capital markets for its issuers, others are concerned that it makes further US sanctions against other Russian entities more likely. Francesca Young and Sam Kerr report.

Confidence is sweeping through the CEEMEA bond market as huge volumes for some of 2018’s most maligned issuers have pushed volumes up to record breaking levels for the first fortnight of a year. But despite the strong start, some bankers are concerned that the difficulties of last year are a whisker away from making a comeback. Francesca Young, Lewis McLellan and Sam Kerr report.