Thursday, 24 May 2007

Nomura reopens Moscow office after nine years

Financial News May 22, 2007

Jason Corcoran in Moscow

Nomura, Japan’s largest investment bank, has reopened its Moscow office nine years after pulling out of Russia in the wake of the 1998 financial crisis, when it lost $600m (€445m).

Hiroshi Toda, chief operating officer, said Moscow will be the launchpad for Nomura’s expansion into central and eastern European markets.

The re-entry to Russia comes amid a flurry of interest from international investment banks as capital markets activity in the country hits a record.

Russian companies have raised over $20bn from stock market listings this year, with analysts predicting volumes to exceed $30bn by the end of the year, leading even the most reluctant investment banks to return to Moscow and prompting a fierce war for talent in the country.

Toda said the operation’s main role will be to act as a bridge between Russian corporate borrowers and Asian capital markets. The affiliate will also advise Russian companies and banks preparing to enter the Asian and international markets.

He told Russian online newspaper Kommersant that it was not an opportune time for the country’s companies to list on the Tokyo, Hong Kong and Singapore stock exchanges because their requirements are more rigorous than those of the London Stock Exchange.

However, he said there might be a place for Russian companies when the Asian market becomes saturated with Chinese firms.

Nomura' Moscow office, which opened on March 13, employs five investment bankers. It will focus on underwriting and initial public offering advisory services and will not engage in brokerage activities.

Maxim Seltzer was hired last year from Japanese rival Daiwa Securities as head of Russia and the Commonwealth of Independent States within Nomura’s investment banking division.

Nomura has been winning mandates in Russian real estate. It was an adviser to last year’s flotation by Sistema-Hals, the property arm of Russian electronics conglomerate Sistema, and this month was appointed as joint global co-ordinator of a $1.5bn flotation by PIK Group, one of the country’s largest property developers.

It worked on last year’s pre-flotation convertible bond issue for gold miner Angara Mining.

Japanese rival Mizuho Corporate Bank last year acquired the Russian operations of compatriot regional bank Michinoku Bank, giving it full licence to operate in the country. Mitsubishi UFG is also plotting a push into Russia.

Goldman Sachs and Lehman Brothers have been hiring heavily in Moscow after a long period away.

Vladimir Kuznetsov, director of equity financing at Moscow brokerage Finam, said there are 35 investment banks involved in initial public offerings and mergers and acquisitions in Russia. He said: “Here we are with the new opportunity for Russian companies to attract financing – this time from Asia.”

Two weeks ago, Russia's second largest bank VTB raised $8.2bn from a Moscow and London stock market listing, which is the biggest float completed globally so far this year and the largest from the European banking sector. Article tags:

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