Actuality, November, 21, 2007

Fact

The Russian companies continue to increase the initial offerings.

For the 3Q2007 there were 16 IPO (including the largest Sberbank and V?B offerings) as compared to 12 in January-September, 2006. The experts consider that by the end of 2007 there will be approximately 30 companies on the market

that will attract ab out

$26 bln.

The analysts mark an increasing value volume of the market by 40 % for 3Q2007 (as compared to 2006), up to $19,2 bln. It is more than the market volume for the whole 2006 year ($17,7 bln.). Average IPO volume totaled $1198,1 mln. Financial sphere, construction and development occupy 76% altogether of the value volume of

the market ($14,5 bln.). Besides, the experts point out that 86% of the value volume of the market falls on means attraction to the company and only 14% of the value volume of the market  – on means attraction by the current stockholders. The situation was different in the previous year. Means attraction directly to the company accounted for 28 % of the value volume of the market.

For 3Q2007 the share of the Russian stock exchanges increased (the MICEX, RTS, ?SE) during IPO. They took 43 % of the value volume of the market as compared to 33 % for 3Q2006. It is connected with Sberbank and V?B offering in Russia. The research authors ascertain that on the London Stock Exchange (LSE) falls 57%.

Earlier the LSE was the basic floor for Russian IPO.

It accounted 94% of the value volume in 2005.

In 2006 it was 61%. The experts are sure that in 2007 there would be an increase of both quantitative and value volume of the market.

One can’t exclude that the companies would fail achieving the point of $26 bln, marks Halil Shehmametyev, the manager of Otkritie Financial Corporation analytical department.

IPO volume is increasing normally. Probably, if there was no liquidity crisis, there would be more investments.

For example, Zenit Bank, Prosperity Holding postponed the offerings, also because of

the problems on the financial markets.

Nikita Ryauzov, the director of MDM Bank investment department also agrees with such point of view.

“The first half-year was successful, but then there were the problems with liquidity”, he marked. The expert is cautious

in predictions because the situation is not stable. “There is a probability of worsening and there are also some companies that can cancel IPO planed for this year”, he considers. “The investors’ conduct is cautious.

The crisis phenomena still continues to influence, but it is more a psychological one as the investors do have money”.
According to Ryauzov, increase in Russian stock exchanges’ share is connected with the entry extension of

the western investors to the Russian market.

Besides the offering on the Russian market is cheaper. However, if the offering is about $1 bln., the companies prefer to do it abroad,

the expert points out.

Halil Shehmametiev considers, that offerings increase in Russian trading floors is, first of all, connected with the FFMS policy, “that fights for the Russian market stay in Russia”.