Foreign funds now own 81% of all shares listed on Moscow Exchange -bourse
Reuters
Published Jul 29, 2021 09:55AM ET
MOSCOW (Reuters) - Global foreign funds increased their holdings of Russian stocks to more than 80% of all shares trading on the Moscow Exchange in the first half of this year, the bourse said on Thursday, attracted by higher dividend yields than in other emerging markets.
U.S. sanctions and increased debt issuance to fight the coronavirus crisis pushed foreign investors' share of Russia's OFZ treasury bonds to its lowest since 2015 earlier this year, but stocks have largely escaped the same fate, buoyed by rising oil prices in 2021.
Foreign funds held 80.7% of shares freely floated on the stock market as of July 1, the Moscow Exchange's head of primary markets, Natalia Loginova, told media during a webinar. That was up from 65.6% in 2020, but slightly below 83.3% in 2019.
Loginova said investors from the United States and Canada accounted for 54% of the total, with 22% from the United Kingdom and 21% from the rest of Europe.
"We are talking about non-residents - large, global, institutional investors," Loginova said, putting the foreign fund inflows down to the outperformance of the MSCI Russia index this year and relatively high dividend yields offered by many Russian companies.
The Moscow Exchange estimates dividend yields in Russia at the end of the year will reach 7.9%, higher than in other major emerging markets, such as Turkey, estimated at 5.1%, South Africa at 4.7% and China at 2.4%.
(Graphics: Russia leads other EM countries in dividend yield: https://graphics.reuters.com/RUSSIA-MOEX/jnvweglgovw/chart.png)
Russia has seen a flurry of initial and secondary public offerings since online retailer Ozon made a strong debut on the U.S. Nasdaq late last year, with depositary receipts trading in Moscow.
The central bank is preparing to simplify the regulatory environment and remove obstacles to incentivise IPOs, it said earlier this month, and the bourse is expecting more than 10 IPOs or SPOs by the end of 2021.
"We have a good IPO pipeline, the central bank's measures are contributing to it, plus Ozon's success story is attracting new issuers," Loginova said.
UBS said in March that Russia was set for an IPO boom this year, which could raise at least $10 billion.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.