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Foreign government securities are awaited on the Russian stock market
The Federal Service for Financial Markets wants to attract to Russia not only depositary receipts of foreign companies, but also bonds issued by other states. Last Friday, Deputy Head of the Federal Financial Markets Service Vladimir Gusakov told Interfax that the agency plans to introduce changes to the standards for issuing securities to the Ministry of Justice in December, including those regulating the issue of bonds of foreign countries. As Mr. Gusakov explained, we are now talking about securities, the issuer of which is a foreign state, and not a non-resident legal entity. It is assumed that these will be government bonds denominated in rubles. As the FFMS explained to the agency, in order to issue securities, the issuing state will be required to disclose data on the state of the budget, external and internal obligations. In addition, the placement and public circulation of foreign securities is permitted in the presence of either an international treaty or an agreement between regulators. Russian market participants believe that the issue of such securities may be of interest to neighboring countries.“The two most important factors on which the issue of government securities really depends are their profitability and demand from investors,” believes Igor Dun, an employee of the capital market operations department of the Bank of Moscow. “However, until changes have been made to the legislation and there are no parameters for issuing such securities, it is difficult to predict anything.”
Most likely, the issue of such securities may be of interest to the CIS states that actively cooperate with Russia and need ruble resources. According to Mr. Dong, government securities of Kazakhstan, which has a good international rating and a stable economic and political situation, may be most in demand for market participants.
However, this is not the first attempt by the regulator to attract foreign issuers to the Russian stock market. Two years ago, the Federal Financial Markets Service became seriously concerned about the departure of Russian companies to Western trading platforms. As the head of the department, Oleg Vyugin, announced then, it is planned not only to improve conditions for domestic issuers so that they do not go to London to trade, but also to attract foreign companies to Russia. In this regard, a bill on Russian depositary receipts (RDR) appeared. The other day it passed the second reading in the State Duma and, perhaps, these securities will already appear on the market next year. Mr. Vyugin’s department expects that RDRs will be issued for their shares by Russian companies, which at one time re-registered their entire business with Western structures in order not to conduct an IPO within the country. And the regulator has every reason to believe that such companies will come to domestic exchanges. Recently, X5 Retail Group, which manages the Pyaterochka and Perekrestok retail chains, announced that it could offer its shares to investors in Russia. In addition to the “returnees”, there is another group of issuers that can issue Russian depositary receipts - these are originally foreign companies that have assets in Russia.