CEE equities: Back in business
A trio of successful listings out of emerging Europe has boosted bankers’ hopes of an equity primary markets renaissance in 2013, with prospects for further supply from Russia, Turkey and beyond.
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.