Russian debt and equity placements in 6M19 up 25% from 2018

Russian debt and equity placements in 6M19 up 25% from 2018

This year has already seen 26 equity capital market deals worth $1.9bn and 81 debt deals worth $16.2bn / bne IntelliNews

By bne IntelliNews July 2, 2019

Debt and equity deals by Russian corporate issuers in January-June 2019 have already exceeded all placement volume for the entire last year by 25%, RBC business daily reports on July 2 citing the estimates of Dealogic platform.

Notably, the equity deals soared 2.5-fold in 1H19 as compared to 2018. Russian market saw 26 equity capital market (ECM) deals worth $1.9bn, versus eight deals of $739mn in 2018.

As reported by bne IntelliNews, the largest deals included an SPO of Nornickel and Evraz, SPO of TCS Group, SPO of Polyus gold miner, and an IPO of Headhunter on NASDAQ. SPOs dominated the market, and the analysts surveyed by RBC believe that investors prefer quick accelerated book building deals with existing and liquid shares to avoid volatility.

At the debt capital market (DCM) 81 deals were closed in 1H19, worth $16.2bn versus 24 deals for $13bn for the entire 2018.

The renewed interest in Russian assets is attributed to monetary easing by the US Federal Reserve, lower perceived sanction risks, recovery of Russian sovereign ratings to investment-grade levels.

As reported by bne IntelliNews, Morgan Stanley recently argued that emerging market currencies are favourably placed in 2019, and the Russian ruble best of all, despite a weaker outlook for global growth. Ruble gained 9% year-to-date against the US dollar so far in 2019, while the Finance Ministry is selling record-high quantities of OFZ federal ruble bonds.

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