By Andrei Skvarsky
Investors are expecting discounts of between 15% and 20% on initial public offerings of Russian shares, according to a survey by Royal Bank of Scotland.
Investors have previously sought discounts of about 10 percent but the recent market volatility and the poor performance of recent Russian listings will not have helped the cause for upcoming IPOs.
Russian sugar manufacturer Rusagro recently cancelled a domestic IPO on the Micex and RTS, pleading market volatility. Days before, Oleg Deripaska's molybdenum miner Strikeforce Mining and Resources delayed an IPO in Hong Kong.
However, investors believe the Russian economy may grow by between 3% and 5% this year, according to the findings of the survey, in which 35 institutional investors were questioned last month.
The proportion of investors concerned about Russia's political environment has shrunk by 14%, though political influence remains one of the main risk factors. Other key sources of risk are oil prices, still the dominant force in the Russian economy, and corporate governance.
Retailing, real estate, telecommunications and media are considered to be the most attractive sectors to invest, according to the RBS findings.
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