This story in Russia Today HERE tells us that Russian industrial giants are being put off the London stock-market due to new rules enforcing greater disclosure. It could also be that the rebuff Russia has been given by the EU and NATO over Kosovo and Georgia is causing a new layout in the world’s power structure, with Russia looking to Asia now for future growth, and cooperation.
If London is to compete, it will have to free itself from the restrictive regulation, and from control by the EU, which seems determined to snub Russia and Asia as often as possible, just as they are becoming potentially Britain’s most important future trading partners. The decline of America as a consumer market is being matched by the extraordinary growth of the Asian middle class. Europe is simply going to bypassed if t doesn’t shape up and start competing.
The Americans poured into London to escape the Enron law – Sarbanes Oxley, which forced far greater exposure onto companies listing in the US. It seems that similar excessive regulation is now starting to hurt London in the same way.
March 31, 2008, 11:14
Russian firms ditch London for Asia
The wave of Russian companies listing in London may be coming to an end, with many now looking towards Asian bourses. Less stringent disclosure regimes and booming economies are the big draw.
Gazprom announced in November it was looking at a Shanghai listing.
In January the world’s biggest aluminium maker Rusal moved its placement from London to Hong Kong in the third quarter of this year, according to the Financial Times. The origins of Rusal boss Oleg Deripaska are being probed by the British courts.
Now Asia’s first integrated bourse Singapore is in Moscow for talks with Russian majors.
“If you look at our foreign companies only half of them are from China, the rest from different parts of Asia and as far as Europe. Our procedure is very transparent, the whole listing time from the announcement you want to do it to the time you list is only 6 weeks,” confirmed Lawrence Wang, executive VP of Singapore exchange.
A Russian shipping company is favourite to list first in the world’s biggest port city.
“There are a lot of the global competitors of Russian shipping companies traded in Singapore. Therefore in a way it is not very surprising that the largest Russian companies think about listing in Asia,” Dr. Reinout Koopmans from equity capital markets of Deutsche Bank, said.
Transport expert Eduard Faritov at Renaissance Capital says the Russian shipper with the closest Singapore ties is Primorsky Shipping Corporation, whose CFO is based there.
Known as Prisco, the company has a history of innovation, becoming the first shipper to go public in Russia back in 1992.
Exchange reviewer Standard & Poor’s told RT the first Russian listing in Asia could already happen this quarter.
“Any time, it takes 18 weeks, I know a few companies have been there in talks. Now that we have the Sarbanes-Oxley Act in New York, and in London there are talks that listing requirements for foreign companies might become stricter,” affirmed Russian director of Standard and Poors Svetlana Borodina.
This week the Hong Kong exchange is coming to Moscow to prove it is even better placed for tapping China, the world’s fastest growing economy.
It is being followed next week by Messrs Sarbanes and Oxley. They face a struggle to turn back the tide of listings they themselves scared East.
UPDATE – non-dom taxes are driving out many others. See here