IPOs in Russia deterred by high interest rates, market volatility - MOEX

MOSCOW. March 14 (Interfax) - The number of companies in Russia that are interested in carrying out an initial public offering is growing, but persistently high interest rates and heightened volatility on the market are holding them back, the director of issuer relations at the Moscow Exchange , Natalya Loginova said.

"The circle of companies thinking about an IPO is constantly growing. The question of when these companies will appear on the market is open. But the fact that every day, every week there are new companies that are starting to ask questions about an IPO is a fact of our life. We don't know when they will actually enter the market. The [Central Bank's] high key [interest rate] is not helping, in my view," Loginova told reporters on the sidelines of the third Russian Financial Market Forum organized by ACRA.

There is also the factor of high market volatility, she said. "So that you understand what heightened volatility is for the buy side, it's when managers are afraid to even leave their desk so as not to miss a moment to either sell or buy something. And when they're afraid to leave their desks, it's very difficult for them to look at new companies," Loginova said.

"Heightened volatility on the market is not very conducive to careful, thoughtful analysis of new companies. So the process of considering new deals might be delayed. As soon as volatility decreases, we will certainly see more market listings," Loginova said.

When the Central Bank begins a cycle of easing monetary policy, issuers will start to actively enter the market, she said. "In my view, this is a direct dependence. Any clear signs and signals in favor of monetary policy easing will significantly increase activity on the primary market," Loginova said.