06 February 2013, 03:51 / Finance

Moscow Exchange IPO may become popular

The IPO of the Moscow Exchange could become popular if investors fall for the record low entry limit - 10 shares cheaper than 700 rubles. So far there are few retail orders, brokers admit Galina Kamneva It is not yet known whether the Moscow Exchange will be able to conduct a truly popular IPO / A.Rudakov / Bloomberg

The exchange collects applications from retail investors through Alfa Bank , Alor, Aton, Finam, BCS and Otkritie . These companies will receive a commission of 0.5% of the average price of shares purchased by them (or their clients) during the IPO.

The Moscow Exchange has set the minimum package for entry into an IPO at 10 shares, representatives of three Russian brokerage companies that collect applications told Vedomosti. The day before, the company began a roadshow and collection of applications, which will end on February 14. The placement will take place on February 15, the company reported. The exchange estimated the expected proceeds from the transaction at 15 billion rubles, of which shares worth 9 billion rubles. will be sold by existing shareholders who had to present their shares for sale before February 2. The volume of supply may increase by 5 billion rubles. – depending on investor demand. These figures correspond to approximately 11–17% of the authorized capital.

Yesterday, brokers began sending out letters inviting them to participate in the stock exchange placement. Taking into account the announced price range for shares (55–63 rubles per share), the cost of the minimum package will be 550–630 rubles. For comparison: the minimum purchase amount for VTB shares during the IPO of the state bank in 2007 was 30,000 rubles, the entrance ticket to the public IPO of Rosneft cost 15,000 rubles.

According to Finam President Vladislav Kochetkov, his company received about 100 phone calls yesterday, but so far there have been less than 10 applications submitted. He believes that demand from investors will increase in the coming days. “At the moment, we are not seeing rush demand,” echoes Pavel Sorokov, head of the “Internet trading in the derivatives market” department of BKS Broker, adding that it is too early to sum up the results: there is still a lot of time before the end of accepting applications. He did not even rule out that in the future these stock exchange shares will become blue chips.

According to Sorokovy, the exchange may be attractive to private investors, “because it guarantees the payment of large dividends.” “Conservative investors can participate in IPOs with an eye to dividends,” he emphasizes. On Monday, the exchange announced a new dividend policy, providing for payments of at least 30% of the group’s net profit according to IFRS for 2012, at least 40% for 2013 and at least 50% for 2014. In mid-December last year, when the previous dividend policy was approved, it was supposed to allocate at least 20, 25 and 30%, respectively, to payments to shareholders.

However, this does not guarantee a high dividend yield, private investor Alexander Volodin is sure. “If you buy Sberbank, the income will be higher,” he calculated. Vedomosti's interlocutor assures that he will not participate in the exchange's IPO and considers its price too high: based on the announced price - $4.02–4.6 billion at the lower limit and $4.37–5 billion at the upper limit. The world's leading trading platforms are now not much more expensive than the Moscow Exchange's valuation. The capitalization of the New York Stock Exchange is $8.45 billion, the London Stock Exchange is $5.2 billion. At the same time, the P/E indicator of the Moscow Exchange is 15. The NYSE and Deutsche Boerse have a similar valuation, and most exchanges have less, he emphasizes.