Moscow Exchange provides Russian companies with access to the public capital markets and advises on listing procedures and corporate governance best practices. Recent financial infrastructure reforms have made placing securities and trading on the Exchange just as convenient as leading global marketplaces.
The year 2014 was challenging for the Russian stock market due to declining interest in Russian securities from institutional investors and rising domestic interest rates. Nonetheless, Moscow Exchange succeeded in launching new investment vehicles and attracting new issuers to the Equity Bond Market.
A number of significant equity capital market transactions took place. February 2014 saw Lenta Ltd place GDRs totalling RUB 34.3 bln on both Moscow Exchange and the London Stock Exchange (LSE).
In addition, several SPOs were completed. The Bank of Russia sold half its stake in Moscow Exchange for RUB 16 bln in June, while Otkritie Bank and QIWI completed SPOs. In early 2015, Russian retailer Magnit also conducted an SPO.
Changes made to legislation in 2014 allowed foreign securities to be listed on Russian exchanges at the discretion of the organiser of trading (i.e., the exchange) without a pertinent agreement signed with the issuer. This helped Moscow Exchange to admit Russian corporate Eurobonds to trading in autumn 2014. The ability of Eurobonds to deliver returns in foreign currency makes them particularly attractive to investors in a high volatility environment. Twenty-three corporate Eurobonds and 13 sovereign Eurobonds had been admitted to trading on the Exchange by the end of 2014, with more to be listed in 2015.
In late 2014 the Exchange reduced the lot size from USD 200 000 to USD 1 000 for three Eurobonds to make them more accessible to private investors. Furthermore, the Exchange is in active communication with other issuers to reduce the lot sizes for their exchange-traded Eurobonds in order to broaden their investment appeal.
More foreign securities joined Moscow Exchange. In June, Yandex shares were listed and added to Moscow Exchange’s major indices. In December, trading in shares of Polyus Gold, which has a Premium Listing on the LSE, was launched on Moscow Exchange.
Some structured products were also offered through the Exchange in 2014. These included Rosbank’s exchange-registered bonds tied to underlying assets (palladium and foreign securities), as well as Waste Management bonds, which were based on a concession contract for municipal solid waste processing and disposal in the Chuvash Republic.
The total volume of corporate bond placements rose 2.7% YoY to RUB 1.75 trln in 2014.