April 24, 2020 / 5:42 PM / a month ago

Russia's Sovcombank delays listing amid market turmoil

MOSCOW, April 24 (Reuters) - Russia’s Sovcombank, among the top domestic banks, will delay seeking a stock market listing until next year, according to first deputy CEO and co-owner Sergei Khotimsky on Friday.

Sovcombank, one of Russia’s top 15 banks by assets, was preparing an initial public offering (IPO) for the first half of 2020, but has now moved it to at least next year, Khotimsky, said.

“Our plans to have a listing are still there,” Khotimsky told an online briefing on Friday. “I don’t know when the next window (for IPO) will open up but we will be ready.”

Russia’s currency and equity markets, like others across the globe, have fallen sharply as the coronavirus has spread.

At the peak of the sell-off in March, MOEX, Russia’s top stock exchange index, was posting a 23% year-to-date loss, trading near two-year lows.

It has slightly pared losses since then but is still some 20% off its all-time high reached in mid-January.

Sovcombank is co-owned by a number of Russian businessmen, including brothers Sergei and Dmitry Khotimsky. The sovereign wealth funds of Russia, China, Saudi Arabia, Japan and Qatar hold minority stakes.

Russia, once a lucrative market for investment bankers thanks to its fat fees, was hoping for an equity raising renaissance this year, as the number of deals has fallen drastically since western sanctions were imposed on Moscow in 2014 over the annexation of Ukraine.

Oleg Borunov, deputy chief executive with another Russian private bank, the Credit Bank of Moscow, said that his bank was expecting over a dozen firms to be seeking an IPO, but not now in 2020.

“There will be no IPO market this year... IPOs planned for this autumn will be postponed to spring of 2021 at their best - its hard to imagine that situation will improve in May-June,” Borunov said.

A source familiar with IPO preparations said there was still one firm that was holding out hope of a listing this year, if there was to be a strong market rebound.

“But no-one actually believes that anything could be done before the window will close in June,” the source said. (Reporting by Tatiana Voronova, Andrey Ostroukh, Olga Popova;Writing by Katya Golubkova; Editing by Elaine Hardcastle)

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