The Russian Stock Market and Domestic IPOs: Revival under Restrictions
Following the rather auspicious years 2020 and 2021, the following year (2022), the Russian stock market found itself in dire straits. First, sanctions imposed on Russian companies and financial institutions prompted international markets to stop trading in Russian companies’ stocks and to cancel Russian companies’ IPOs. Second, international financial markets responded negatively to the Federal Reserve System’s attempts to fight inflation by tightening its monetary policy. Many Russian companies said they were ready to go public but the current market situation is forcing them to delay their plans to enter capital markets. The Moscow Stock Exchange reports that about 40 Russian companies said they were ready to go public in 2022-2023. Additionally, there are Russian companies registered in the jurisdictions supporting the sanctions; their stocks are no longer traded on western markets and the companies now have to consider redomiciling and selling their stocks on other exchanges. Even though the Russian stock market did stay afloat after the shocks of 2022, growth opportunities remain limited, which is particularly relevant when it comes to attracting IPO investors. What could enliven the IPO market in Russia? What might companies planning an IPO in Russia look like? What types of investors could become involved in Russian IPOs and what role could they play in the companies going public? What should companies going public in Russia consider when working with Russian investors? What should the Russian financial market regulator focus on amid the current situation in Russia, what changes are needed to IPO regulations in Russia? Could introducing digital financial assets onto Russian exchanges improve liquidity on Russian capital markets? Could Russian exchanges be attractive venues for trading in international companies’ stocks?
