OREANDA-NEWS. December 21, 2007. According to Alfa-Bank’s analysts, the Russian IPO and SPO market will, at year-end, reach a record volume of $32 bn, with nearly 40 placements ranging from $29 bn to $54 bn expected in 2008, reported the press-centre of Alfa-Bank.

Among the investors are: banks, metallurgical, electric power and real estate companies.

In 2007, as in previous periods, investors focused on larger deals. The average volume of IPO and SPO deals in the Russian Federation was $1,3 bn, taking into account the large placements by VTB and Sberbank, or $526 mln without them, with similar figures in the emerging markets (not including Russia) being a mere $150 mln.

Placements by small and mid-size companies in the second half of 2007 proved to be successful, in spite of the liquidity crisis. In August-December, 12 companies offered $6,4 bn, with an average deal volume of $533 mln. It was not only the external market factor that contributed to the success of IPOs, but also the investor-friendly parameters of placements.

The proportion of offerings changed to the advantage of the Russian trading floor. If in 2005 94% of placements by Russian companies took place in the West, in 2007 52% of them were in Russia. IPO/SPO second market liquidity is drifting towards the Russian market.

The sector structure of placements also changed, the large-scale offerings by non-primary companies resulted in a decreased volume of liquid shares in the oil-and-gas sector from 68% at the end of 2006, to 55% in November 2007. In 2007, IPO/SPOs in banking and retail covered 68% of placements.

The earning capacity of securities issued in 2007 is far above the RTS yield index. Of the 30 primary and follow-on offerings in 2007, half of them (including VTB) were traded below the initial price (maximum discount — 56%), with all others sold to the highest bidders (maximum growth — 75%).