China, US, investors buy into Moscow bourse

February 15, 2013

RECORDER REPORT

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The order book for Moscow Exchange's stock market flotation has been fully covered, a day ahead of the bourse's IPO, with China's sovereign wealth fund CIC joining Russia's state private equity fund in investing. China Investment Corp (CIC) is seeking to match the amount the state-backed Russian Direct Investment Fund (RDIF) is investing, which could see both take around 20 percent of the shares, or around $100 million each, the sources said. One of the sources said CIC was seeking up to 25 percent of the shares.

The rest of the book is being filled with US, UK and Scandinavian investors, one of the sources said.

Success of the issue is politically and economically sensitive given President Vladimir Putin sees it as part of his efforts to transform Moscow into an international financial hub. Putin, who will host finance ministers and central bankers from the Group of 20 nations who will be in Moscow on Friday for talks, called last month for all sales of shares in state companies to be held in Russia.

A price range for the exchange been set at between 55 and 63 roubles, valuing it at between $4.0 billion and $4.6 billion, with the float seeking to raise around $500 million. The Moscow Exchange, in which Russia's central bank owns 24.3 percent, will float on Friday, choosing to list on its own platform under the symbol MOEX. In a separate deal that could see the largest investment into Russia by an Arab sovereign wealth fund, Qatar is in advanced talks about injecting $3-$3.5 billion into Russia's second-largest bank, VTB. VTB will likely issue the Qataris with $1.5 billion of new equity and $1.5 billion of mandatory convertible bonds under the deal, Britain's Daily Telegraph newspaper reported, citing sources familiar with the deal.