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Eurasian Business Briefingstock markets and IPOs

More Russian IPOs planned as investors return to Moscow

Detsky MirForeign investors are being lured back into Russia by businesses seeking to tap the public equity and bond markets, the Financial Times reports today, after almost three years when they have shied away over concerns of the impact of sanctions as well as worries over the economy.
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Gazprom’s Asian charm offensive struggles to excite investors

Singapore Stock ExchangeAs their board considers the possibility of a share placement on one of Asia’s major stock exchanges – most likely Hong Kong – executives from Russian energy giant Gazprom flew into Singapore and Hong Kong this week for the first time since 2015 in a bid to drum up interest; but even after last year’s commodities rally and a revival in Russian stocks, Asian money managers have yet to be persuaded that Gazprom is worth adding to their portfolio.
Deputy Chief Executive Officer Andrey KruglovNews that Gazprom (more…)

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Saudi Aramco to woo Chinese with IPO

Saudi Aramco compound DahranSaudi Aramco has asked JPMorgan Chase & Co and Morgan Stanley to help with what, at $100bn, is expected to be the world’s biggest IPO, according to the Wall Street Journal, while HSBC has emerged as the leading contender for a role among a list of five banks that could provide a pipeline to Chinese investors. (more…)
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Nurly Zhol and structural reforms set to boost Kazakh growth to 2.5% – IMF

Nurly ZholA combination of targeted fiscal support, exchange rate adjustment, strengthened domestic liquidity management and structural reforms have helped Kazakhstan counter the effects of lower oil prices and slower growth in Russia, China and Europe, the IMF pronounced this week; and, while GDP growth slowed to 1% in 2016, it is expected to bounce back to 2.5% in the current year.
Significantly, (more…)

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Prospects of IPO for Vodafone India recede with merger talks

Mukesh AmbaniVodafone this week confirmed that it is discussing the possibility of merging its struggling India arm with domestic rival Idea in an attempt to create critical mass and counter the effects of the price war triggered by the entry into the market of petrochemical billionaire Mukesh Ambani’s 4G Jio network last September.
The merger talks were confirmed earlier this week after a spike in Idea’s share price. If successful, they would end hopes of the stock market flotation of Vodafone India that has been on the cards for over a year, but which were thrown into disarray by the Jio launch and its success in building up market share by offering free calls and internet access.
Idea and VodafoneThe deal would combine India’s second and third biggest mobile operators to create one of the largest in the world with nearly 400 million customers. Idea is listed on the Bombay Stock Exchange and is controlled by the industrial conglomerate Aditya Birla Group. It has 188 million customers, just behind Vodafone on 203 million and, like its potential merger partner, has invested heavily in building its market position, and is now saddled with heavy debts.
Vodafone’s Indian adventure has not been without its difficulties. It has invested more than £22bn and built a strong market position, but the business is valued at only around £6bn following a series of painful multibillion-pound write-downs.

 
 
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Trump victory gifts Russian oligarchs $29bn as energy share prices soar

Gennady TimchenkoRussian oligarchs: Rising share prices and a resurgence in the value of the rouble brought on partly by the prospect of a Trump administration have added approximately $29bn to the fortunes of some of Russia’s richest men, making President Putin’s inner circle among the chief beneficiaries of last November’s presidential election, according to figures compiled and released by Forbes this week.
Among the biggest winners (more…)

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Tehran Stock Exchange accepted for WFE membership

TSE chairman Hassan Qalibaf AslThe World Federation of Exchanges (WFE) has written to he chairman of of the Tehran Stock Exchange (TSE) approving the Iranian exchange’s membership of the 63-strong international trade association of publicly regulated stock, futures, and options exchanges, TSE chairman Hassan Qalibaf Asl confirmed this month. The move will ease Iranian capital’s entry into the global network of the stock exchanges and investors access to their data and information, he said.
TSE membership (more…)

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Ulyukayev invites Germany to take part in Russian privatisation programme

Russian Minister of Economic Development Alexey UlyukaevThere is no reason that German companies should not participate in the Russian privatisation programme, Economic Development Minister Alexey Ulyukayev told journalists in Stuttgart yesterday. “German companies can participate in privatization in Russia through IPOs (more…)

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Sime Darby to float Weifang Port

Sime Darby MD Timothy Lee and Weifang port expansionThe Malaysian-based Sime Darby multinational conglomerate this week announced its intention to float Shandong Province’s Weifang Port on one of China’s stock exchanges as it looks to monetise its assets and maximise its returns. Sime Darby acquired the port from the authorities in Shandong in 2005 and has since invested around $300m in turning it into a profitable mid-sized seaport and increasing the number of its berths from four to 15. Its current $200m, 5-year expansion plans will see a further 8 berths added by the end of 2017 and its number of customers rise to 500.
In March 2014, it set up the Weifang Port Services Co in a joint venture with the Weifang Port Company and the Shandong Hi-speed Transport & Logistics Investment Company to oversee the construction, management and maintenance of the port’s the sea channel, anchorage and other elements of its infrastructure.
Shandong ProvinceAnnouncing the company’s decision to list the port, Sime Darby MD Timothy Lee claimed that the port “had been profitable since day one of the takeover”, and was recognised as one of the most efficient and cost-effective ports in China. Last year it posted pre-tax profits of $13.7m on revenues of $45.76m.

 
 
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Moscow appoints US law firm as consultants in Rosneft privatisation

rosneft logo 2Rosneft privatisation: The US-based international law firm White & Case will act as legal advisors to the Russian government during the privatization of its stake in the state-owned oil company Rosneft, (more…)

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Russian Direct Investment Fund to be cut loose from troubled VEB bank

RDIF logoThe Russian Direct Investment Fund (RDIF) is to be spun off from the troubled Vnesheconombank (VEB) and will instead report into the country’s Federal Property Management Agency, officials close to VEB told Vedomosti this week. The change in its status is expected to be put into effect by the end of the summer. 

Fisht Olympic Stadium Sochi

Fisht Olympic Stadium Sochi

Set up five years ago to attract foreign investment through project co-financing, the RDIF is now feared to be in danger of being pulled down by VEB’s current difficulties which stem from its use to finance politically motivated but unprofitable projects, notably the 2014 Winter Olympics in Sochi. “VEB is almost on the verge of bankruptcy …while the RDIF is an efficient company and should not sink with it,” one of the officials said. 
Since it was established in 2014 the $10bn RDIF has been used to prepare a number of companies for their IPOs, including the Moscow Exchange and diamond producer Alrosa; and to attract foreign investment into several leading companies operating in key sectors, including Rostelecom, Nord Hydro and the Russian Forest Products Group.

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US investment in Indian equities larger than in Chinese, claims Kotak

Mumbai stock exchange

Reuters

Indian equities: By the end of last year, US investors had pumped $12bn and $11.8bn into Indian and Chinese equities respectively, according to data compiled by the Mumbai-based Kotak Institutional Equities brokerage. 1.8% of all US foreign equity holdings are now in India compared to 1.6% in China. While this represents a $5bn rise for India since 2013, US direct investment in China has declined by $1.8bn over the same period. Overall, the average US investor’s equity allocation to emerging markets was down from a peak of 18% in December 2009 to 12%.

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Beta version of “Russian NASDAQ” trading platform ready by year end

NASDAQRussian NASDAQ: The Far East and Baikal Region Development Fund is working on creating a Russian trading platform similar to NASDAQ, according to its CEO of Alexei Chekunkov, and a beta version could be ready by the end of year. “We are working on creating a trading platform in Russia similar to NASDAQ in the United States and which would (more…)

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Number of Beijing billionaires overtakes New York

Beijing skylineBeijing billionaires: There are now more billionaires in Beijing than in New York, according to this year’s  Hurun Report, which calculates that the Chinese capital is home to 100 billionaires compared to the Big Apple’s 95, Moscow’s 66, Hong Kong’s 64 and Shanghai’s 50. The report’s founder Rupert Hoogewerf puts China’s explosive wealth creation down to the recent flood of new IPOs triggered by a relaxation in market regulations. 

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China’s Chongqing Casin Enterprise to acquire Chicago Stock Exchange

Chicago Stock ExchangeA group of investors led by China’s Chongqing Casin Enterprise Group is set to buy the Chicago Stock Exchange (CHX), it emerged last week. The move would give  CHX access to the funding it requires to upgrade its listings programmes, its CEO John Kerin explained.
“They (more…)

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HKEx planning mainland commodities trading platfrom

HKEx CEO Charles Li XiaojiaHong Kong’s Futures and Securities Exchange HKEx is planning to launch a commodities trading platform in mainland China, its chief executive Charles Li Xiaojia announced last week. The platform would most likely be located at Shenzhen, an hour’s drive from Hong Kong. The mainland commodity futures market (more…)

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Trading suspended on Chinese stock market suspended as CSI300 slumps

Chinese stock market slump

CSI300 slumps: Trading on China’s stock market was suspended today after a survey reporting that Chinese manufacturing activity contracted for a 10th consecutive month in December sent the country’s blue-chip CSI300 index tumbling by 7%, its worst performance in nine years. The Shanghai Composite Index (more…)

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ICBC issues $10bn bond in London

ICBC LSE bond launch 16-12-15In the first dollar-denominated issue by a Chinese mainland bank on the London Stock Exchange (LSE), the UK arm of the Industrial and Commercial Bank of China (ICBC) last week launched a $10bn medium-term note (MTN) program in the City of London. “We are (more…)

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China Postal Bank PSBC raises $7bn in run-up to world’s largest IPO

PSBCPostal Savings Bank of China (PSBC) has raised $7bn in its latest pre-IPO funding round by selling a 17% stake to a group of investors including JP Morgan, UBS and Alibaba’s financial affiliate Ant Financial in the run-up to a flotation on the Hong Kong stock market that could eclipse even the $25bn that the e-commerce site raised last year.
PSBC (more…)

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43 IPOs lined up in Kazakh privatisation programme

Train KazakhstanKazakh privatisation programme: Kazakhstan is planning to sell off stakes of at least 25% in 43 large state-owned companies via initial public offerings (IPOs) in 2016-17, the state-run Samruk-Kazyna sovereign wealth fund said yesterday, as (more…)

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