Belarusian State Companies Unlikely To Make IPOs Till 2011
Prime-Tass
One should not expect IPOs from Belarusian state companies within a year or two, because it would be impossible to have an adequate market value due to the global financial crisis, Lucas Romriell, Global Head of Equities at Galt &Taggart Securities, told reporters on Tuesday.
He did not rule out that two or three medium-sized producers offering unique solutions could make IPOs in the next two years. “The situation on stock markets will be clear in about six months, and IPOs may simply be postponed,” he said.
“We are interested in cooperating with over 80 Belarusian companies working outside the banking sector, primarily in the processing industry. There were many transactions in Ukraine last year, with assets inferior to those offered in Belarus. We observe excellent prospects in raising foreign capital. Most foreign investment will be in larger banks and producers,” Romriell said.
“Belarus is the last country in Europe to develop its stock market. Theoretically, the Belarusian stock market is quite attractive and cheap, but a lot needs to be changed to meet requirements of foreign investors,” the expert added.
He believes domestic investors must have additional incentives, while foreign investors should receive comprehensive information about the results of financial operations and profit and loss statements.
“Smaller shareholders will be able to sell stakes via brokers, who normally charge high fees. Belarus needs simple conditions enabling minority holders to sell their stakes,” Romriell said.
Galt &Taggart Securities Regional Director Oleg Gud criticized the practice of the State Property Committee of Belarus, which puts up for sale tiny stakes worth $2,000 to $4,000. “Large players aim to acquire assets worth between $5 million and $20 million,” he said.
“The Belarusian stock market is estimated at $4-6 billion, including the banking sector. The daily share trading volume at the Belarusian exchange stands at $300,000, which compares to $5 million in Bulgaria. Objectively, there are no reasons why Belarus cannot reach the same level,” Gud said.
Commenting on the IPO “entrance fee”, Gud said it depended on the exchange. “Getting ready for an IPO in Frankfurt may cost up to 50,000 euros, in Warsaw between 100,000 euros and 200,000 euros; an IPO in London will cost between $1 million and $2 million, and New York will be even more expensive. Belarus still has time to get ready,” Gud said.
Founded in 2000, Galt & Taggart is a leading investment bank in Georgia, Ukraine, Moldova, Azerbaijan, and Uzbekistan. The firm benefits from the local knowledge and financial backing of Bank of Georgia, a leading financial institution in Georgia. Galt &Taggart Securities offers brokerage, analysis, investment banking, and asset management services.