A SUPPLEMENT TO EUROMONEY - APRIL 1997The Russian story should be an easy one to sell to international equity investors. Russian blue chips such as oil producer Lukoil, natural gas producer Gazprom and national long-distance telephone company Rostelecom are perhaps not yet household names. But they are already well known in the investment community. The Russian natural resource sector, featuring companies with vast reserves and low valuations, has become an investment byword for bargain. Even infrastructure companies appear attractive, with brokers pointing out how undervalued telecoms companies are compared with their counterparts in other emerging markets. It is all the more surprising then that there have been so few successful international equity offerings from Russia. Privatization in Russia, though undertaken on a vast scale, has not been synonymous with capital-raising only now are companies seriously looking to the international markets for funding. The planned-economy mentality always being able to rely on the government for more money is finally breaking down and companies are realizing that they have to raise money. But it takes time to prepare international issues. The consensus among bankers in Moscow is that it will take at least until 1998 for companies to raise equity capital in the international markets on a significant scale. |