It looks as though the London and New York stock exchanges feel they have to compete between themselves for the right to afford trading floors to Russian company stock.
Yet only two or three years ago western investors shied from this paper as the devil from holy water. The other day the British embassy arranged a special seminar for Russian businessmen, where London City financiers extolled the advantages of their exchange over the New York one. Such advantages do really exist. London is free from the pall of major financial scandals that occurred in the US in recent years, and its restrictions on foreign share registration are less stringent.
But the focus lies elsewhere. Europe's largest stock exchange in London, whose trading exceeds the combined trading of all European bourses, has opened a real "hunting season" for Russian companies. Their shares - for the first time in history - are in demand in London, and very much so.
Behind it all is a simple and important thing - a drastic change in the mood of western investors, their new appraisals of the Russian economy. Growing awareness that the Russian economy is on the mend and that this upturn promises to be strategically long has freed the hands of large trading houses and investment funds of the Old and New World, which are telling their dealers to buy shares of the most promising Russian concerns.
An investor is an acrobat balancing between the fear of a costly mistake and temptation of multiple gain. In the case of Russia the internal voice is now telling him: the threshold of unacceptable risk is over.
"Most investors on our exchange are institutional investors, who are perfectly aware of the risks associated with investments in Russian securities," says Marc Bailey, director of business development at the London Stock Exchange. "But they look at the risk through the prism of possible yields, and when it concerns Russia, the yields are very high".
It appears the last nudge that prompted western dealers to move from doubt to action was a recent upbeat remark by Mikhail Kasyanov: Russia's industrial production in the first quarter of the year rose by 6 per cent, which, according to premier, is "highest rate of growth in the past three years". Based on these encouraging statistics, the head of government predicts a GDP growth of 6.4 per cent in the first decade, while last year the appropriate indicator did not exceed 3.4 per cent. Moreover, this time growth is due not only to favourable external business conditions - consistently high prices for hydrocarbon resources and increased output of oil and metals - but also to positive trends in the engineering and processing industries.
By now, listed on the London Stock Exchange and freely traded, are shares of three Russian companies - LUKOIL, Gazprom and Tatneft. Besides, the exchange has a special trading floor for securities (IOB) of foreign companies, including another nine Russian firms. Over the past three years the volume of trading in Russian paper on the IOB has tripled and now accounts for half of all operations.
At the Moscow seminar the British urged Russian businesses to enlarge their presence on City exchange monitors, and not only in the oil and gas sector. That same Marc Bailey admitted that he was now negotiating with "one of the Russian telecommunications companies". The appearance of its securities on the London exchange is a matter of near future, promises this leading London financier.
The British are inviting Russian securities to come, although it is as clear as day that oil prices are most likely to fall. But this does not discourage London analysts. They consider appearance on the exchange to be among large-scale and strategic business decisions, which should not be based on current price fluctuations. The main thing is to avoid a gap between share prices and the real value of assets.
Hence a call from London dealers addressed to future Russian participants of stock jobbing: be transparent. A solid western investor will not buy a single share until he has a clear idea of how the company is run, what makes it tick, and what prospects it has.
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