Russia’s leading stock exchanges, the Moscow Exchange (MOEX) and the SPB Exchange (SPBX), reported record total trading volumes in 2024, up 14% and 77% respectively. Last year saw a Russian IPO boom that is expected to continue this year. 

MOEX saw a turnover of RUB1.49 trillion ($15.2bn) in 2024, a 14% increase on the previous year, reports the RBC business portal and Kommersant. In December 2024 alone, trading volumes reached RUB142.3 trillion, a 2% year-on-year rise.

SBPX did even better with the volume of trading in Russian securities soaring by 77% y/y in 2024 to RUB48.71bn ($494.5bn). The exchange expects to end 2024 in profit, the exchanges press service said on February 1. 

SBPX's bigger gain is related to its larger bounce back as pre-war it specialised in making shares traded on international platforms available to Russian retail equity investors and saw its business all but destroyed by international financial sanctions. SPBX was a big winner from a sea-change in attitudes to equity investments after Russian retail investors finally piled into the stock market, after bank deposit rates fell to a historic low. Since then, it has rebuilt its business, focusing on trading domestically listed shares.

The growth in both markets dovetails with the Kremlin’s plans to develop the domestic capital markets. In his State of the Nation Address in February last year, President Vladimir Putin set the ambitious target for doubling the Russian stock market's capitalisation by 2030, aiming to reach 66% of GDP by that time. In the first eleven months of 2024, the Russian stock market's capitalisation was approximately RUB47 trillion ($513bn), representing about 25% of GDP.

At MOEX, the equity market segment, encompassing shares and depositary receipts, recorded a trading volume of RUB3.8 trillion at the end of December 2024. Throughout the year, MOEX facilitated 13 IPOs and four SPOs, collectively raising RUB87.5bn, as Russian companies, cut off international exchanges and facing sky-high borrowing costs, increasingly turn to the domestic capital markets to raise investment capital. Additionally, two Russian companies secured secondary listings and 25 new Russian ETFs to bring the total to 79 funds, diversifying portfolios across stocks, bonds and money market instruments.

The debt market capital market saw 78 new bond issuers in 2024 on MOEX, to make up a total placement volume of RUB242bn. In all of 2024, 247 companies issued a total of 759 bonds, amounting to RUB8.44 trillion, excluding overnight bonds.

However, despite the active issuance, the ruble-denominated MOEX index underperformed in 2024, dropping by 7% over 2024, with the index falling from 3,099 points at the start of 2024 to end the year at 2,883 points. During 2024, the MOEX index peaked at 3,521.72 points and recorded a low of 2,370.28 points.

At the same time, the dollar-denominated RTS Index that used to be preferred by non-resident investors fell by 17.6% over the course of 2024, falling from 1,083 points in January to 893 points by December. The RTS posted a high of 1,220 points and a low of 723 points over the course of 2024.

The Russian stock exchange remains active although it has been shorn of most foreign investors that used to form about half of its total capitalisation. Now only investors from “friendly countries” are allowed to invest. Investors that held Russian shares following the invasion of Ukraine in February 2022 three years ago have had their holdings frozen and have been unable to exit the market.

IPO boom to resume in 2025

With the economy putting in an estimated 4% growth last year and real incomes climbing to a record high, companies have been benefiting from the war and looking to expand production to meet rising demand. Many have turned to MOEX to raise fresh and affordable capital, leading to an IPO boom last year that is expected to continue this year.

Pre-war there was an IPO boom as Russian companies rushed to take advantage of positive sentiment for Russia that led to a string of 12 IPOs in twin listings on international and Moscow’s exchanges, raising around $1bn each. There were another 25 IPOs in the pipeline for 2022, until the invasion of Ukraine curtailed all activity.

Three years into the war and IPOs are back, albeit at greatly reduced valuations. A total of 14 IPOs were floated in 2024 for a total of RUB81bn. In addition, over the past two years, there have been 14 SPOs worth a collective RUB158.8bn. The largest secondary transactions in 2023 were the SPO of VTB (RUB93.4bn) and the bank OVK (RUB26bn).

In terms of the number of primary transactions, the previous year is guaranteed to be one of the most successful in the history of the Russian market, reports Vedomosti, following the previous active years in 2006 and 2007. In those years, according to Refinitiv, issuers conducted 19 and 21 primary listings respectively. But the volumes of capital raised were many times greater than the current $17.4bn (over RUB460bn (with an average dollar exchange rate of RUB26.7 per dollar in 2006).

The impressive results of 2006-007 were largely due to the two largest IPOs in Russian history: state-owned oil company Rosneft and Russia’s second largest bank VTB in the so-called “People’s IPO.” In June 2006, the oil company raised $10.7bn (RUB290bn at an exchange rate of RUB26.97/$) during a share placement. To date, this is the best result a Russian company has ever achieved and one of the best IPO results globally for that year. Only two Chinese banks were able to raise a larger amount of funds in 2006: ICBC ($22bn) and Bank of China ($11.2bn).

The following year, another landmark IPO took place when VTB Bank floated its shares. As a result, the bank raised $8bn (RUB208bn at an exchange rate of RUB25.76/$) – the largest on the global market in 2007 and the second largest in Russian history. However, the VTB IPO didn’t go well and had to be bailed out by the government, which bullied oligarchs into buying the shares. The IPO remains controversial, as the bank’s share price has remained underwater from the IPO price ever since, hurting retail investors in particular.

Excluding the extremely large transactions with state-owned companies from the average transaction size in 2006-2007, it turns out that the remaining companies attracted an average of RUB10.2bn ($380mn) on the market in 2006 and 16.2bn ($630mn) in 2007 – many times higher than the same indicator for the current year (RUB5.7bn, $62mn), reports Vedomosti, but is comparable with the recent largest transactions on the market: Element (RUB15bn – $176mn), Europlan (RUB13.1bn – $142mn), as well as MTS Bank and VI.ru (RUB11.5bn each – $125mn and $131mn respectively).

IPO of Russian companies at the turn of 2023-2024

 

Company	Sector	IPO date	IPO volume (RUBbn)	Free float (%)	capitalization (billion)	Number of books collected*	Number of transactions (thousand)	Share of physicists (%)	Share of institutional investors (%)	Related parties (%)
April	Construction industry	30/07/24	0.88	8.1	10.8		1.11
SmartTechGroup	Financial services	29/06/23	0.6	10	6			100	0
Europlan	Financial services	29/03/24	13,13	13	101	9	141.26	57	43
Mosgorlombard	Financial services	28/12/23	0.3	15	2		3.3	100	0
Element	Technology and Telecom	27/05/24	15	14.3	104.9			50	50
MTS-bank	Financial services	26/04/24	11.5	13	88.5	10	202.02	55	45
Genetic	Biotech	25/04/23	0.18	12	1.5	2.5	2.99	100	0
Svetofor Group pr	Education	24/05/24	0.14	10	1.4		0.11
GC Yuzhuralzoloto	Metallurgy	22/11/23	7	6	116.7	3	70.46	50	50
Crystal Alcohol Group	Food industry	22/02/24	1.15	13	8.8	2.5	14.74	100
EuroTrans	Oil and gas	21/11/23	13.5	21	64.3		14.97	73	27
Ozone Pharma	Pharmaceuticals	16/10/24	3.45	10	34.5	6	51.78	47	53
Sovcombank	Financial services	12/15/23	11.5	5	230	9.6	75.05	65	35
Astra Group	Technology and Telecom	13/10/23	3.5	5	69.9	22	118.14	70	30
Diasoft	Technology and Telecom	13/02/24	4.14	7	59.1	29	142.57	40	40	20
Promomed	Pharmaceuticals	12/07/24	5.75	6.8	85		10.07	13.9	82.5	3.6
Zaimer	Financial services	12/04/24	3.45	15	23	3.5	59.46	46	54
Car sharing Russia	Telecom and transport	06/02/24	4.2	9	46.7	4	45.3	50	50
VI.ru	Technology and Retail	05/07/24	11.5	12	95.8	7	56.72	15	79	6
IVA (IVA Technologies)	Technology and Telecom	03/06/24	3.3	11	30	4	38.29	28	47
HFG (Henderson)	Consumer sector	02/11/23	3.5	12	29.2	3.7	43.83	65	35
Arenadata	Technology and Telecom	01/10/24	2.66	14	19	7	28.66	27	57	16
Source: Vedomosti