Russia is a land of big appetites. But it’s starting to look like investors’ hunger for risk has become “very dainty,” a trader at CF Global in London tells Bloomberg News. Indeed, Russia’s Micex Index is the first among benchmark measures in the world’s 20 largest equity markets to fall at least 10 percent from a recent peak, the common definition of a correction, since mid-March, Bloomberg reports.
Yandex, the Russian internet firm, is preparing for a $1 billion IPO on the NASDAQ but news about its IPO is mainly about the political and oligarch takeover risk in the prospectus as well as having to provide information for the FSB, Russia’s secret service, on contributors to well known whistle blower Alexey Navalny. Investors may flock to the IPO as Yandex is the sixth most visited website in the world.
However, they should take note that just seven months after Mail.ru IPOed in London in November 2010, Mail.ru’s founders sold their stake last week and the stock fell 20%. With pervasive government and oligarch intervention in business in Russia, accessing foreign exchanges and investors may be the only way for Russia’s entrepreneurs to recoup their initial investment.
