by John Helmer - Thursday, December 10th, 2009
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Relayed by John Helmer in Moscow

Question for Toby: has the Hong Kong Stock Exchange rejected the share listing application by United Company Rusal?

Toby’s answer: Affirmative grunt.

For at least two months the Hong Kong Stock Exchange and its listing division, and in parallel the state regulator, the Securities and Futures Commission (SFC) have been studying the proposal for listing and sale of shares by United Company Rusal, the first Russian company to attempt to list in the China market. Although the exchange and the commission don’t explain their action in individual cases, it is now plain that they could not agree to approve the listing in several sessions of the 28-member listing committee. The reports of their meetings – on November 19, 26, December 3 and 7 – have been cryptic, with anonymous sources claiming different reasons for deferral and inaction, until now the negative outcome is obvious.
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by John Helmer - Monday, December 7th, 2009
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A D V E R T O R I A L

AND IF YOU LIKE IT ENOUGH, MAYBE I’LL SELL IT TO YOU

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by Editor - Thursday, December 3rd, 2009
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By John Helmer in Moscow

In signals issued just ahead of today’s scheduled meeting of the Hong Kong Exchange Listing Committee, the committee announced a further postponement of its ruling on the Rusal application until December 7. The exchange has issued no public explanation. Media reports claim the reason is that the 28-member committee lacked the minimum required forum of 5 members to sit on the Rusal review. Earlier reports from the exchange had indicated that 8 members had been selected from the 28-member complement for the review. Today’s reports from Hong Kong suggest that 4 of these had dropped out for today’s meeting. The hint is that the applicant and its underwriters are being discreetly invited to take the initiative of withdrawing before next Monday, relieving the exchange of the responsibility of casting a vote on Rusal’s application. This option allows what one underwriter in London suggests as justification — market demand so late in the year is not sufficiently favourable for the share sale.
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by John Helmer - Wednesday, December 2nd, 2009
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By John Helmer in Moscow

A public statement by Deputy Prime Minister Alexei Kudrin, which he then corrected a few hours later, confirms what Russia’s rival oligarch groups, including those seeking Rusal’s bankruptcy, have believed for many weeks. Oleg Deripaska, controlling shareholder of United Company Rusal, has given up control of his shares to Russian state officials in order to stave off his foreign and domestic creditors. It is also the decision of the state officials involved that, for their interest, possibly the state’s, but not necessarily to benefit Deripaska himself, the company must be protected from a shareholding combination of Chinese, Libyan, and other foreign shareholders. In short, Rusal has been nationalized in effect, if not in form.

This is not a last-minute expedient to make Rusal’s initial public offering (IPO) of shares appear to be a genuine privatisation transaction. The transfer of Deripaska’s control stake is a new stage in the way in which state officials run the aluminium concession, which Deripaska has brought to the point of bankruptcy at home, and asset forfeit abroad.
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by John Helmer - Tuesday, December 1st, 2009
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Interview with Maxim Shkadov by Vladimir Kulakov and John Helmer

The 36-year old Kristall Production Corporation is one of the world’s leading producers of polished diamonds, and Russia’s biggest. It remains 100% state owned under the supervision of the federal Ministry of Finance, and is headquartered at Smolensk, where it cuts and polishes diamonds, before distributing them for sale across the world. The sales network for Kristall’s stones covers the major diamond markets – Antwerp, Hong Kong, New York, and Dubai. Maxim Shkadov is the chief executive. On a visit to Smolensk after an interval of fifteen years –the first visit was in 1994, when Alexander Skhadov, Maxim’s father, was the CEO – this interview is the most detailed public assessment of how the Russian diamond industry has fared during the global collapse of demand.
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by John Helmer - Tuesday, November 24th, 2009
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By John Helmer in Moscow

Sad to say, there is no magic in capitalism. If there were, it would have been entertaining to watch how Polyus Gold, Russia’s leading goldminer, suddenly snapped a losing streak on Friday, and rocketed upward with a 4% share price gain in Moscow (MICEX rouble exchange), 7% on the London Stock Exchange, and 8% on the Frankfurt exchange. This came despite a 5% drop earlier the same week, and forecasts from well-known brokerages and investment banks that the share price might have another 5% to fall.

Say the magic word! Add a big puff of stage smoke! Bravo Maestro! The trick is a marvel!
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by John Helmer - Monday, November 23rd, 2009
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November 21, 1695
— Henry Purcell, English composer, died, aged 35

See’st thou not how stiff, and wondrous old
Far unfit to bear the bitter cold,
I can scarcely move or draw my breath,
Let me, let me, freeze again to death.
— Song of Cold Genius, King Arthur

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by John Helmer - Saturday, November 21st, 2009
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By John Helmer in Moscow

Suleiman Kerimov is selling Polyus Gold shares in a bid to raise cash. The market signal triggered a price decline for the Moscow and London-listed share (PGML:LN) of 5% this week through Thursday. A Moscow brokerage is predicting that the selloff may cut the price by 10%.

The chain of circumstances was revealed by a source close to the transaction, who clarified why the first press leak in Moscow suggested that both Kerimov (38%), and his co-controlling shareholder Mikhail Prokhorov (40%, including friendlies), intended to sell 5% apiece, for a total disposal of 10%. Onexim, Prokhorov’s holding, refused to confirm this, and on November 19, Polyus Gold posted this website announcement:
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by John Helmer - Friday, November 20th, 2009
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By John Helmer in Moscow
 

Confucius say – why buy a treasure from a man, if you can wait for him to lose it.

The turmoil now affecting Oleg Deripaska’s United Company Rusal has become a critical test of the difference between the Russian and Chinese approach to resource concessions and national company value. Even those guardians of international financial propriety, the Financial Times and Wall Street Journal, have noticed that Rusal’s market valuation is dropping through the $20 billion point and reaching the mark once privately predicted by Renaissance Capital, now a Mikhail Prokhorov property and Rusal underwriter – just $10 billion.
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by John Helmer - Friday, November 20th, 2009
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