Thursday, February 1, 2007
Medium Fits Just Fine
Russia is going to have a new stock exchange devoted to corporations with market capitalizations below 115 million USD. Yes this is good, but not just for the obvious reasons. It will give growing companies more options of raising capital besides traditional bank loans, they now can offer IPOs, and an increasing number will enter the bond market as well. Obviously there will be great opportunities, we recommend you proceed with caution, and judge each sector and company like you would in the domestic U.S. market. Consumer Goods and Services should see explosive growth, as well as Business Services sector. We view this as the next step in Russia’s development from an economy and financial market system devoted to mega corporations resembling monopolies to a more balanced picture able to sustain growth over the long-term. We plan on having a section of the newsletter or website devoted just to this segment.
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4 comments:
You are right. Pundits on Russian Fixed market warn that a probability of defaults would be significantly higher than in 2006. The relative numbers are 20–4%. Small cap market might bring a lots of diversity in a market but at the same time would increase risks of defaults.
Same pundints that don't know their "ass from first base". That's why I read this site. I don't believe in a meltdown unless energy nosedives. Get real!
I'm looking forward to seeing how Russian Mid and Small Caps are or are not going to diverge from the performance of the traditional major players including ADR's listed on Western exchanges.
In theory this should bode well for the tech industry, if the U.S. is any example. Innovation in general and companies that one day become industry giants get their start as small corporations. Innovation and risk taking does not happen from monoliths.
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