Another year, another Russia shutdown: after two years of brisk flows, capital markets activity came to an abrupt halt in April when the US imposed sanctions on Oleg Deripaska, Viktor Vekselberg and their associated companies.
Eurobond issuance dried up, a clutch of IPOs were postponed and investment bankers covering Russia – a fairly phlegmatic bunch – resigned themselves to a relatively lean summer in the hope that the autumn would bring a resumption of business.
As threats of further sanctions emerged in August, from both the State Department and the US senate, such expectations began to look increasingly optimistic. Nevertheless, as markets reopened in September, bankers were still not despairing of an imminent pick-up in activity.
“There is a lot of pent-up demand from issuers,” says one market participant. “If we could get a bit of clarity on what the scope of any additional sanctions was going to be, or more importantly what it isn’t going to be, then we would see quite a backlog of capital markets activity coming through.”
Postponement
Most of the interest is centred on equity markets, where primary flows had returned to pre-Crimea levels last year.
