Opportunities In: Russian Capital Markets

Publication Date	May 2007
Publisher	IFR Market Intelligence
Product Type	Report
Pages	136
ISBN Number	not applicable
Product Code	IFR00005

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Summary

Boasting some of the best macroeconomic fundamentals of any country in the world, Russia offers phenomenal opportunities for investors. The last few years have shown fantastic growth in the banking sector and capital markets and the consensus among economists is that the investment boom underway is set to continue for many years. But with its recent history of economic turmoil, anyone looking for a share in Russia's awesome growth will need to tread very carefully.

Opportunities in: Russian Capital Markets, an authoritative intelligence report from IFR, offers an expert insight into the challenges and opportunities facing investors in the country:

Clear macroeconomic analysis - reviews important economic and financial indicators, plus political events, oil price scenarios and the influence of the oligarchs and the Kremlin
Banking fundamentals and reforms - reliable evaluation of the changes and challenges facing the sector and where banks are seeing growth and investment
Latest product trends - comprehensive insight into the performance and future outlook of every asset class, with comparisons to other BRIC countries
Extensive data - over 125 tables and charts are integrated within this definitive report, providing a wealth of key data on economic and product performance, plus forecasts

The report draws on the author's long experience in reporting and commenting on Russia's financial markets, offering answers to key questions:

What are the main drivers behind foreign investment inflows?
How have the exchanges grown and how are they likely to develop further?
What is the CBR's strategy for bond market growth?
Which foreign private equity funds are gaining prominence in Russia?
Where are the best opportunities in the US$2.5bn securitisation sector?
Where are the prospects for more diverse derivatives products?

Content

Chapter
The Russian Macroeconomic Situation
- Introduction
- Economic Indicators
- Rates Of Growth
- Economic Drivers Of Growth
  - Oil
  - Consumer Spending
  - Construction
  - Financial Services
  - Investment
Russian Oligarchs And The Kremlins Nine Commandments For Big Business
- State Involvement
- The Nine Commandments
- The Bric Prediction
Current Financial Situation
- International Reserves And Debt
- State Funds
  - Stabilisation Fund
  - State Investment Fund
  - State Venture Capital Fund
  - State Future Generations Fund
- Inflation
  - Interest Rate Control
- Rouble Appreciation, Currency Controls And De-Dollarisation
  - Currency Flows
- Money Supply And Dollars
- The Federal Budget
  - Oil And Economic Expansion
- Trade And The Balance Of Payments
- Political Events
- Politics And Fiscal Loosening
- Oil Price Scenarios
Chapter
The Banking Sector
- Overview
- Initiating Sector Reform
- Russian Bank Sector Fundamentals
- Bank Reform
- 2004 Mini-Crisis
- Deposit Insurance
- Sector Consolidation
- Foreign Ownership Of Russian Banks
  - Subsidiaries Rather Than Foreign Branches
- A New Mega-Regulator
- Bank Sector Growth
- Consumer Credit
  - Car Loans
  - Credit Cards
  - Mortgages
- The Regions
- The Future Role Of Banks
- Sector Challenges
- Falling Capital Adequacy
- Non-Performing Loans
  - Cbr Acts To Curb Npls
- Home Credit Bites The Bullet
- Devaluation And Currency Risk
- Exposure To Equities
- Investing In Banks
- Portfolio Investments
- Private Equity Investments
Chapter
Equities - Market Composition & Performance
- Background
- Rts Development
  - Inception To October 1997
  - October 1997 To October 1999
  - October 1999 To Today
  - Summary
- Rts Performance Under Putin
- Rts Composition
- Growing State Share Of The Index
- Ipos
- Diluting The Index
- Opening Up New Sectors
- Pricing Challenges
- Owners Motivations
- Ipo Pipeline Congestion
  - Banks
  - Utilities
  - Small Companies
- Impact On Liquidity
- Stock Exchange Trading
- The Main Exchanges
  - Trading Volumes
- The Otc Market
- Russia As An Emerging Market
- International Investment Flows Into Russian Equity
- Stock Valuations And P/E Ratios
- Traditional Market Drivers
- The Seven Year Boom
- Liquidity
- Oil Prices
- The Effect Of Oil On Liquidity
- Rouble Appreciation
- Bank Sector Liquidity
- The Tax Schedule
- Foreign Investment In Russian Funds
- Foreign Capital Inflows
- Domestic Consumption
- Domestic Investment - The New Market Driver
- Investment Growth
- Investment Structure
- Sources Of Investment Capital
- Investment Pitfalls
- State Investment Programmes
  - Power
  - Defence
  - Nuclear
- Market Volatility
- The Links Between Gems
  - Electricity
  - Banks
  - Fixed-Line Telcos
  - Consumer
- Sell-Off Cycles
- Seasonal Factors
Chapter
Bonds
- Background
- Economic Recovery
- Bond Market Development
- Bond Market Structure
- Rising Turnover In All Sectors
- Inflation And Interest Rate Challenges
- Lessons From Russias First Ever Corporate Bond Default
- Sovereign Bonds
- Sovereign Eurobonds
- Paris Club Redemptions
- Aries Bonds
- Spread Performance
  - Influences On Spread Compression
  - Russian Debt Becomes A Defensive Asset
- Domestic Sovereign Bonds
- Government Debt Strategy
- The Ofz Market
- Domestic Bond Ownership
- Corporate Rouble Bonds
- Market Development
- Secondary Market Trading
- Currency Liberalisation
- Corporate Eurobonds
- Bank Borrowing Of Eurobonds
- The Rise Of Bank Eurobonds
- Municipal And Other Bonds
- Broadening The Borrowing Base
- Other Debt Instruments
- Credit-Linked Notes
- Veksels
- Asset-Backed Securities And Mortgages
  - Obstacles To Expansion
- Russia Railways Red Arrow Spv
- Bonds And Real Estate
- Rouble Eurobonds
Chapter
Securitisations
- Background
- Market Beginnings
- Growth Prospects
- Domestic Securitisations
Chapter
Syndicated Loans
- Background
- Leading Borrowers
- Leading Lenders
  - The Influence Of State-Owned Enterprises
Chapter
Mergers & Acquisitions
- Background
- Sector Changes In M&A
- Steel
- Aluminium
- Telecoms
- Banks
- Utilities
- Mobile Phones
- Supermarkets
- Transaction Structure
- Lending Constraints
- Lbos And Mbos
Chapter
Private Equity Funds
- Background
- Market Opportunities
- New Target Areas
- Oligarch Funds And The Rise Of The Minigarch
- The New Investment Class
- Sources Of Private Equity Capital
- Future Challenges
- The Main Russian Private Equity Funds
- Troika Capital Partners
- Alfa Capital Partners
- East Capital
- Firebird Management
- Baring Vostok Capital Partners
- Prosperity Capital Management
- Mint Capital
Chapter
- Venture Capital
- Background
- Home-Grown Venture Capital
- Early Successes
- Early Funds
- Russian Venture Company
- State Telecoms Venture Fund
- Regional Venture Capital Funds
Chapter
Pension Funds
- Background
- Pension Reform
- Pension Reconstruction
- Pension Market Structure
Chapter
Mutual Funds
- Russian Investment In Mutual Funds
- Sector Revival
- Current Investment Preferences And Future Projections
Chapter
Derivatives
- Background
- Legal Developments
- Otc Trading
- Forts
- Micex Derivatives Market Section
- Russian Derivatives Trading In London
Tables & Figures
- F: Russian Consumer Market Dynamics, 1999-2006e (Us$Bn, %)
- F: Average Russian Monthly Wage, 2000-08f (Us$)
- F: Russian Population Demographics And Financial Statistics
- F: Individual Russian Client Wealth, 2006 (Us$)
- T: Russian Gdp By Production And Use, 2005 To 2006 (Rubbn, %)
- T: Russian Gdp Growth By Sector, 2006 (% Y-O-Y)
- F: Worlds Largest Economies, 2006-07
- F: Top Holders Of Foreign Exchange Reserves (Us$Bn)
- F: Russian Stabilisation Fund Growth, Jan 2004-Oct 2006 (Us$Bn)
- F: Russian Inflation, 2003-09f (%)
- T: Russian Budget Law And Execution, 2003-07 (% Gdp)
- F: Russian Federal Budget Revenues And Expenditures, 1998-2007e (% Gdp)
- F: Oil Price - Brent Quarterly Average, 1q2006-4q2007f (Us$/Bbl)
- T: Russian External Trade, 2004-06 (Us$Bn)
- F: Russian Exports, By Sector, 2006 (%)
- T: Russian Economic Performance Under President Putin, 2000-06
- T: Public Trust In Russian Politicians, 2006 (%)
- T: Duma Election, Dec 2003 - Share Of Popular Vote, Number Of Seats
- T: Brent Oil Prices - Forecasts And Implications
- T: Russias Top 30 Banks, September 2006 (Us$)
- F: Sberbanks Share Of The Russian Deposit Market, 2003-06 (%)
- T: Top Russian Consumer Loan Providers, 2006 (%, Us$M)
- T: Top Russian Car Loan Providers, 2005 To 2006 (Us$M, %)
- T: Top Russian Credit Card Issuers, 1h2006 (Us$M, %)
- F: Russian Loans Market Growth, July 2004-July 2006
- F: National Household Loans Markets, 2006 (% Of Gdp)
- T: Russian Deposits And Loans, 2002-10e (Us$Bn, %)
- T: Retail Loans - Bank Share, 2005 To 2006 (Rubbn, %)
- F: Banking Liquidity Indicators, Jan 2002-July 2006 (%)
- F: Growth Of Non-Performing Consumer Loans, July 2004-July 2006 (%)
- T: Significant Foreign M&A Deals With Russian Banks, 2004-06 (Us$M)
- T: Russian Banks Stock Exchange Performance, 2006 (Us$M,%)
- F: Rts Index, Sept 1995-Oct 1997
- F: Rts Index, Oct 1997-Oct 1998
- F: Rts Index Oct 1998-July 2004
- T: Market Breakdown, By Sector, Nov 2006 (%)
- T: Top Russian Stocks, Jan 2007 (Us$Bn)
- T: Ownership Of Russian Equities, 2003 To 2006 (%)
- F: State Voting Stock In Top 20 Rts Companies, 2000-06 (%)
- T: Russian Ipos, 1996-2006 (Us$, %)
- T: Annual Value Of Russian Ipos, 1996-2007e (Us$M)
- T: Forecast Ipo Issuance, 2007 (Us$M)
- T: Ipo Share Performance, 1996-Sept 2006 (Us$, %)
- T: Performance Of Ipos Issued In 2006-Jan 2007 (Us$, %)
- T: Top Ipo Performers, 2004-Sept 2006 (Us$, %)
- T: Worst Ipo Performers, 2004-Sept 2006 (Us$, %)
- T: Ipos Trading Below Initial Price, Sept 2006 (Us$, %)
- T: Rao Ues - Projected Ipos, 2007
- T: Proposed Ipos, 2007 (Us$M)
- T: Growth In Trading Of The Individual Segments On Micex, 2006 (%)
- T: Equity Trading - Average Daily Volumes, Mar 2006 To Mar 2007 (Us$, %)
- T: Emerging Markets Funds - Russia Weightings, 2006 (%)
- F: Global Emerging Markets - Country Weightings, Sept 2006 (%)
- T: Russian Indices, By Sector, Mar 2007 (%)
- T: Rts, Gem And Oil Price Performance, 2000-06 (%)
- T: Weekly Inflows To Russia, Gem And Bric Funds, 2006-Feb 2007 (Us$M)
- F: P/E Ratios, By Sector, 2007e
- T: Russian Share Price Performance And P/E Ratio, Jan 2007 (Us$, %)
- F: Russian Company P/E Ratios, Jan 2007
- F: Money Supply Vs Equities, 2000-06
- F: Equities Vs Oil Prices, 2005-06
- T: Oil Export Revenue, 2000-06f (Us$)
- T: Oil Exports, 2000-06f (M Bbl/D)
- F: Russian Exports, Imports And Oil Price, 2000-09f (Us$)
- F: Breakdown Of Worldwide Oil And Gas Reserves, 2006 (%)
- T: Energy Stocks Related To Oil Price Scenarios
- F: Russian Banks - Excess Reserves, 2003-07 (Rubbn)
- T: Tax Payment Calendar, 2007
- T: Inflows To Russia, Gem And Bric Funds, 2006-Feb 2007 (Us$M)
- F: Russian Net Private Capital Inflows, 1998-3q2006 (Us$Bn)
- F: Russian Stock Movements, Jan-Feb 2007 (%)
- F: Fixed Investment And Stock Exchange Sector Movements, 2004-06 (%)
- T: Investment Breakdown And Growth, By Sector, 1q2006-3q2006 (%)
- T: Sources Of Investment Financing, 2005 To 2006 (%)
- F: Rts Index, Jan 2005-Mar 2007
- T: Rts Cycles, 2003-06 (%)
- T: Rts Rallies, Year-End And New Year, 2000-05 (%)
- T: Rts Returns, 1997-2007 (%)
- F: Russian Bonds - Sector Breakdown, Dec 2006 (%)
- F: Russian Bond Growth, By Sector, 2003-06 (% Cagr)
- F: Bond Holder Distribution, 1999-1h2005 (%)
- F: Bond Maturities, 2002-1h2005 (%)
- F: Bond Distribution, By Sector, 1999-2005 (%)
- F: Primary Market Bond Issues And Redemptions, 2002-1h2005 (Rubbn)
- F: Bond Trading On Secondary Market, 2002-1h2005 (Rubbn)
- F: Distribution Of State Debt, 2004-08e (%)
- F: Outstanding Federal Bonds (Ofz Vs Gsb, Traded Vs Non-Traded), 2006-08f (Us$Bn)
- T: Russian External Debt, 2006-08e (Us$Bn)
- F: Russian Paris Club Debt - Breakdown By Country, Jan 2006 (%)
- F: Embi+ Spread, 2006 (Bp)
- F: Correlation Between Sovereign Bonds And Oil Prices, 2000-06 (%)
- F: Russias Beta, 1q2004-3q2006 (Bp)
- F: Russian Domestic Bond Ownership, 2006 (%)
- F: Bank Shares Of Bond Issuance, By Segment, 2006 (%)
- F: Bond Deals, 2001-Nov 2006
- F: Top Corporate Borrowers, 2006 (Us$Bn)
- F: Bond Market Breakdown, By Sector, 2006 (%)
- F: Russian Eurobond Market 2001-07e (Us$Bn)
- T: Emerging Markets International Bond Issuance, 2001-2q2006 (Us$Bn)
- F: Russian Corporate Bond Issuers, Nov 2006 (%)
- F: Eurobond And Cln Distribution, By Type, Nov 2006 (%)
- T: State-Owned Banks - Lending Capacity, 1h2006 (Us$M)
- T: Current Russian Abs Issues (Us$M)
- T: Russian Retail Banking Structure, 2004-1h2006 (Us$Bn)
- T: Mortgage Loan Market, 2005-06 (Us$M, %)
- T: Mortgage Market Leaders, 1h 2006 (Us$M, %)
- F: Bonds Connected To Real Estate Borrowing (Rubm, Us$M, %)
- T: Rouble Eurobond Issues, 2005-06 (Rubbn)
- T: Russian Abs Ratings
- F: Russian Securitisation, By Asset Class, 2006 (%)
- F: Securitisation In Russia And Kazakhstan, 2003-06 (Us$M)
- F: Russian Syndicated Loans Market, 2001-06 (Us$Bn)
- F: Russian Syndicated Loans Market, By Sector, 2005 To 2006 (%)
- F: Russian Syndicated Loans, By Sector, 2002-06 (%)
- T: Russian Acquisitions Of Foreign Steel Assets, 2003-06 (Us$)
- F: Russian M&A Transactions, 2005 To 2006 (Us$M)
- F: Russian M&A Transactions, By Sector, 2005 To 2006 (Us$M)
- T: Top 10 Russian M&A Transactions, 2005-06 (Us$M)
- F: Russian Private Equity Investment, By Sector, 2005 (%)
- F: Private Equity Investment, By Stage, 2005 (%)194
- F: Private Equity Investment, By Federal District, 2005 (Us$M, %)
- F: Sources Of Private Equity Capital, Russia Vs India, 2006 (Us$Bn)
- F: Russian Ipos, 2000-06, Rebalanced (Us$Bn)
- F: Growth Of Russian Domestic Mutual Funds, 2000-06 (Rubbn)
- T: Forts Trading Volumes, Sept 2001-Sept 2006 (Rubbn)
- T: Forts Trading Volumes, 2005 To 2006 (Rubbn)
- T: Rts Trading Volumes, By Instrument, 3q2006 (Rubbn)