RUSSIALINK: “Large Russian Companies Are Turning Inward; The mobile operator Megafon’s plan to delist in London is the latest sign that the West is becoming inhospitable” – Leonid Bershidsky/Bloomberg

Hand Pulling Cash from Envelope

“The planned delisting of Megafon PJSC, Russia’s second-biggest mobile operator, from the London Stock Exchange is no ordinary event. The company is one of the most liquid Russian stocks trading overseas, and its exit is further evidence that the country’s businesses are turning inward as exposure to the West becomes increasingly problematic. In 2011, almost 70 Russian companies’ depositary receipts traded in London. Offering those securities wasn’t just a way to raise money from foreign investors; it was also considered a badge of honor, a sign that a company had arrived. Now, there are fewer than 50 Russian listings. Soon after Russia annexed Crimea in 2014 and was hit with the first, relatively light Western sanctions, First Deputy Prime Minister Igor Shuvalov urged the country’s companies to delist as “a question of economic security.” A number of firms followed that advice after discovering how quickly their stock prices could tank on Russia-related political news. For some companies, such as the homebuilder PIK, the meat producer Cherkizovo or the drugmaker Pharmstandard, the London listing didn’t provide enough liquidity, and forced them to observe the constraints of a Western public company and adhere to stringent transparency requirements that carried significant costs. …”

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