Financial Times
April 1, 2002

By ANDREW JACK.

Russia's domestic equities markets are set to receive a fresh boost this week with the launch of a prospectus for the first initial public offering on the country's main exchanges. RosBusinessConsulting (RBC), a Moscow-based media and information technology company, plans to raise about $12m this month by placing 16 per cent of its shares on the RTS and MICEX exchanges, which cater predominantly to foreign and domestic investors respectively.

The sums are relatively modest, but the move is an important symbolic step towards lifting confidence in Russian equities markets, in the wake of strong performance and increasing investor interest from abroad. RBC, founded in 1993, reported net profit of $7m on $17m in sales last year, with revenues split between out-sourcing and other computer-related services, and the sale of information services including a finance-oriented news wire operated by more than 170 freelance and full-time journalists. Michael Hammond, an adviser to the IPO from the boutique City Capital and a non-executive RBC director, said: "Unless a country the size of Russia has strong domestic capital markets, it is never going to grow. The time is right for the first IPO."

Mr Hammond said a further 4 per cent of shares could soon be available following the conversion of a $4.5m bond issue last December into equity, and another 2 per cent which can be released at the discretion of the underwriters. The lead manager is the Moscow-based Aton Capital.