MOSCOW. (Anatoly Gorev, financial analyst, for RIA Novosti) - After long debates about who would be the first to go public - Sberbank or VTB - the decision was made in favor of the leader of the Russian banking market.
At the end of January, Sberbank announced that it was launching its additional issue of shares, which would be placed among legal entities and individuals in Russia.
The bank can place up to 3.5 million shares. On the day of the announcement the market price of the stake was $11.5 billion. The question is whether Sberbank will be able to generate buyers' interest, not only portfolio investors (investment and insurance companies and pension funds), but also private investors?
Experts believe it will and that demand for the stock will not be reduced even by expectations of a high placement price, which is still unknown. At first the minimal bid was set at 68,000 rubles ($2,568). But this announcement sent Sberbank's already floated shares down, which is hardly surprising given that on January 29, their price on the MICEX was 91,000 rubles ($3,437).
As a result, the bank's management had to explain to the market players that it was only the technical limit for accepting bids, but that the flotation price for the additional issue would be equal to the market price plus a premium for the bank. This means that it is certain to be high, given that Sberbank has long been leading growth on the Russian stock market.
Nevertheless, Sberbank has every chance of successful placement, experts say. First of all, it is very attractive given its financial performance and position on the market. "It is important to remember that Sberbank controls half of the individual deposits market and half of the individual loans market," said Alex Kantarovich, managing director of MDM Bank.
An indirect sign of legal entities' interest in Sberbank was a recent decline of other banking stocks on the market. Experts believe that investors have been "liberating cash" to buy into Sberbank.
Will Sberbank be as attractive for individuals? Sergei Rybakov, director of Aton Line, says that it should be of greater interest for potential individual investors than any other issuer. Apart from Sberbank, only one or two banks are traded on the market now. Moreover, Russians tend to view banks - especially if they are state-owned - as stable institutions, even despite the shocking events following the 1998 default. Individual investors see their stocks as an analog of government bonds, i.e. tools with the highest reliability possible, analyst say. Besides, their profitability is significantly greater than that of government bonds, which is also an important factor.
Some experts warn, however, that the planned success of the "popular IPO" can be blighted by "purely technical" factors, as was the case with Rosneft. Notably, the time allocated for the advertising campaign is extremely short: the forthcoming IPO was announced on the radio and in the press only on January 31, and there are still no TV ads. There are almost no brochures on the subject at Sberbank's branches.
Rosneft's IPO held last summer had similar shortcomings, analysts say. Because of the inarticulate advertising campaign, most of the issue was bought by legal entities, while individuals bought only $600 million worth of shares instead of the projected $1 billion. Still, there are reasons to hope for better results of Sberbank's placement, at least due to its position on the market.
The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board
