By Marcus Williams in London
Russian aluminum maker UC Rusal today reportedly raised $2.24 billion from its Hong Kong and Paris initial public offerings, after the company priced the shares around the middle of the range indicated in marketing literature.
Bankers said the listing could led to a trickle of further Russian listings in Hong Kong but they doubt it will turn into a tide.
Rusal, the world’s largest aluminum producer by output, priced its 1.61 billion shares at 10.80 Hong Kong dollars ($1.39), according to several media reports today.
The indicative range for the IPO was 9.10-12.50 Hong Kong dollars. If the over-allotment or “greenshoe” option is exercises, Rusal could raise up to $2.56 billion, Dow Jones reported.
Hong Kong stock market regulators restricted the share offering to institutional investors and a few wealthy individuals, owing to the company’s $14.9 billion debt load, operational losses, and other risks.
The unknown quantity for other Russian companies looking east is whether Chinese retail investors will be interested in coughing up to invest in Russian companies, which are not always beacons for corporate governance.
Westerns bankers said they doubted whether Hong Kong could yet challenge London’s position as the pre-eminent destination for Russian and international listings.
A survey earlier this week of 17 analysts by Merlin PR showed the LSE is the top choice, followed by the Hong Kong stock exchange, NYSE Euronext and then Deutsche Boerse AG .
Andrey Kuznetsov, market strategist at Russian investment bank Troika Dialog, said the LSE “will continue to be the international market of choice” for Russian companies over the next 12 months. “Recent defections from New York Stock Exchange, such as Tatneft, underline the fact that maintaining a listing in London continues to be cheaper than in New York,” he added.
Most of the analysts surveyed said they expect international listings by Russian companies to rise this year and return to levels seen before the financial crisis.
Funnily enough, it was the analysts at the international banks who are more bullish on the Russian equities than their Moscow counterparts.
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