By John Helmer, Moscow
Two US banks named in May by Phosagro as mandated arrangers of its initial public offering (IPO) walked away from the share sale attempt after finding little interest among international investors to buy the shares from Phosagro’s owner, Andrei Guriev. The Americans also had problems with verifying how Guriev came into possession of the property he is selling — what one American bank source today calls “the shadow of Yukos”.
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By John Helmer, Moscow
If Phosagro, one of Russia’s leading phosphate miners and exporters, were a Mom and Pop store, the release this morning of the 441-page prospectus reveals that Mom Gurieva and Pop Guriev are selling a good part of the family jewels for cash. The only other seller of shares for the initial public offering (IPO) now under way in London is Maxim Volkov, 39, the chief executive since 2009; he is selling his entire 1% stake.
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By John Helmer, Moscow
When the gravy train to China starts running, it can be educational for investors in the greater Sino-Russian iron-ore market to slow down, and patiently study how Australians, rivals of the Russians and other iron-ore suppliers, behave when the brakes are off – and the regulators appear to be going in another direction.
Australia’s newest iron-ore miner to start shipping to China, BC Iron (ticker BCI:AU),ought to be seeing the benefit of larger announced reserves, more rail and port capacity to ship cargoes, and a freshly minted report from KPMG confirming that a fair valuation of the company’s prospects is a share price between A$3.80 to $4.13. That should be good news too for Ukrainian metals mogul, Gennady Bogolyubov, who is the largest single stakeholder in BCI, with 21%.
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By John Helmer, Moscow
In The Long Good-Bye, private detective Philip Marlowe says of the snob column in the newspapers, “I don’t read them often, only when I run out of things I dislike.” Some people feel that way about the weekly report from Emerging Portfolio Fund Research(EPFR). That is the Boston outfit which tracks the flow of investor funds into and out of emerging market destinations in the aggregate (GEM, EMEA), and in particular countries.
The bad news, out today in EPFR’s bulletin and Uralsib Bank’s weekly analysis, is that outflow of investor cash in Russian stocks and funds hit a record this week of $298 million. This was a big turnaround from the previous week’s positive inflow; though it makes just a small dent in the total flow inward to Russia since January 1 of $3.5 billion.
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By John Helmer, Moscow
For those with a taste for the burlesque, politicians speaking for the cash interests of the perishable food trade are hard to match. The smaller the politician’s country of origin, the louder the petomane, and the bigger the pratfall.
Russia’s chief food inspector Gennady Onishchenko (left image) yesterday ordered the ban on imports of European Union-produced vegetables lifted with special conditions, following negotiations with EU public health officials in Moscow on Tuesday and Wednesday. Reacting to the outbreak of fatal e.coli infections from tainted food in Germany, and misleading information from the German and European Commission (EC) authorities in Brussels, the Kremlin first ordered a partial ban on imports of cucumbers, tomatoes and lettuce on June 1. This was followed a day later by a ban on all European vegetable imports, backed by a warning from Prime Minister Vladimir Putin on European “cucumber poison.”
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By John Helmer, Moscow
A decade ago, when Oleg Deripaska trusted Gulzhan Moldazhova, his principal money-changer, to negotiate with China, the authorities in Beijing were reluctant to agree to permitting what was then called Russian Aluminium (Rusal) to open a representative office in Beijing. Until then Rusal had exported aluminium to China through international traders and warehousers in Hong Kong. The Chinese method for saying no to Rusal at the time was to say nothing – and delay.
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By John Helmer, Moscow
Transneft, the state-owned Russian oil pipeline company, is now refusing to pay state-owned oil producer Rosneft $26 million in money Transneft claims that the China National Petroleum Company (CNPC) should pay for pipeline deliveries of crude oil, but won’t or hasn’t.
The conflict has also revealed discounting tactics affecting all shipborne cargoes of crude oil between the world’s largest energy exporter and the world’s largest energy consumer.
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By John Helmer, Moscow
There are three golden rules for valuing Russian initial public offerings (IPOs) in the international market.
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By John Helmer, Moscow
Who would buy a share in a diamond-mining company whose board of directors lacks anyone with the career experience of mining anything; or of managing a public shareholding company; or of selling commodities in a global market? That’s not a question, the answer to which the Russian Finance Ministry cares if anyone asks; or cares to answer. The Finance Ministry supervises the Russian diamond sector, and the world’s largest diamond miner, Alrosa. And regarding its property, the ministry considers that to be as private as the Oppenheimer family regard De Beers, world’s second largest diamond miner.
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