DEALTALK-Russian and CIS IPOs could reach $20 bln in 2008

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By Daisy Ku and Eleanor Wason

LONDON, July 7 (Reuters) - Russian and CIS IPO activity slumped in the first half due to elections in Russia and global market turmoil but bankers hope a resurgence in the second half will boost full year issuance volume to $20 billion.

Activity for Russia and members of the Commonwealth of Independent States (CIS) dropped 93 percent to $1.1 billion in the first six months of the year as just six companies listed, including firms from Ukraine and Kazakhstan, according to consultancy firm PBN.

But bankers hope encouraging performances by some of the recently listed companies and strong economic growth in the region bode well for planned share sales of Metalloinvest, Mechel Mining and United Company RUSAL in the fourth quarter.

"There was a window in May and I hope there will be a window in October and November," said a London-based equity capital markets banker.

Natural resources companies are booming thanks to strong demand for raw materials in emerging markets, particularly in Asia.

With steel prices in Russia setting new record highs every month since January, the country's biggest iron ore producer and one of its leading steel groups, Metalloinvest, is heading for a London listing around November.

The company, owned by billionaire Alisher Usmanov, and its shareholders could sell 25 percent of share capital for as much as $8 billion in a deal arranged by Merrill Lynch MER.N, Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and Renaissance Capital, sources close to the matter said.

The Metalloinvest deal is likely to vie for investor interest with the new spin-off of Mechel MRLR.RTRS (MTL.N), Russia's biggest coking coal miner.

Mechel Mining is eyeing a $4 billion London listing in November in a deal arranged by Goldman Sachs (GS.N), Merrill Lynch, Renaissance Capital, ABN Amro and BNP Paribas (BNPP.PA), sources familiar with the matter said.

The company, which owns coal plants including Yuzhny Kuzbass, Yakutugol, OJSC Yakutugol and iron ore producer Korshunovsky, is likely to benefit from Czech coal miner New World Resources' NWRS.LNWRSsp.PR recent listing.

New World Resources shares have traded up 20 percent since their $2.5 billion London IPO in May.

Freight rail operator Globaltrans (GLTRq.L), supermarket chain Magnit (MGNTq.L) and Ukraine's top agriculture company Mironovskily Hleboproduct (MHP) (MHPCq.L) have all seen their shares jump between 20 and 29 percent since offerings in April and May.

The wild card is UC RUSAL.

The world's top aluminium producer, which shelved a $9 billion flotation last September because of concerns about the global liquidity crunch, is looking to list in the fourth quarter.

Like Metalloinvest, RUSAL is keen to sell shares in order to gain a currency it can use for mergers and acquisitions.

But with Israel-based Russian entrepreneur Michael Cherney winning the right to sue Oleg Deripaska, owner of UC RUSAL, in a British court last week, the Russian firm is unlikely to seek a London listing now.

Sources said the company is eyeing a dual listing in Hong Kong and Moscow instead.

Some bankers are worried about a rush of stocks linked to both emerging markets and the natural resources sector coming at the same time however.

"There is a real risk for these IPOs. There are a lot of them coming in the next 12 months....They are all very interesting companies but it is a lot of emerging market equity so they are going to struggle," a banker in the resources sector said.

He also said there was a risk the commodities boom may have cooled by the time equities markets recover, making the IPOs less attractive. (Editing by David Cowell)