If debt bankers were the belles of the emerging markets ball in 2012, their equity counterparts were the wallflowers – and nowhere was this more so than in central and eastern Europe. For the first eight months of the year, as yield-hungry investors drove bond spreads across the region ever tighter, equity primary markets remained all but closed, with only a handful of high-quality secondary offerings making it to completion.
In September, however, the first signs of life returned to the market in the form of a bumper $5.2 billion sale of Sberbank shares by the Russian central bank, and by mid-December the placement of large private-sector IPOs from Megafon, Alior and Kcell had engendered a mood of cautious optimism among equity capital market bankers.
By bull market standards, none of the three deals – all of which struggled to attract demand and priced at the bottom of their target ranges – was an outstanding success. In the context of the dismal conditions earlier in the year, however, the market consensus was that to have brought any IPO to completion – and particularly one as large as the $1.7 billion Megafon offering – was a signal success and a positive indicator for 2013.
