Privatization deals should be carried out on Russian markets, but the infrastructure needs to be put in place, Russian President Vladimir Putin said at a meeting dedicated to stock market development.
"These deals should occur on Russian trading floors," he said.
"Privatization done within the country is testament to the fact that our plans to create a competitive financial market are serious, that Russia relies on its market infrastructure and trusts it," Putin said.
If this process is not started now, if the transition is not made to practical work, then "everything will remain on paper and in theory," he said. Privatization should facilitate development and increased capitalization for the Russian stock market, and not heat up foreign financial markets, he said.
That said, "one should not sacrifice the quality of privatization and the interests of companies that think they can raise more money undertaking corresponding measures on hyped-up international markets," Putin said.
Russia needs to make sure that its infrastructure and the entire regulatory system on financial markets are ready, and Russian trading sites should fulfill all requirements and worthily rival leading international exchanges, he said.
Besides that, Russia should provide and present its assets to a wide circle of potential investors in the best way possible, Putin said.
"But here, honestly, I don't understand why work on our exchange should be worse organized than in the placement of corresponding offers on foreign exchanges. These road shows, these trips by representatives of our companies throughout the world before they come out with an IPO, let's say, why shouldn't they be conducted in such an intense manner as when they're coming out, let's say, on the London exchange? I just don't understand that," he said.
"And if it's done persistently and energetically, creatively, and the asset itself is attractive (and it is precisely such assets that we are going to put up on the exchange), I think that the resources raised won't be any less than when coming out, let's say, with an IPO on foreign exchanges," Putin said.
The overwhelming majority of Russian companies are placing their securities on the most prominent international exchanges.
"In the last two years, only one IPO of a relatively large domestic company occurred in Russia, and that's it. Thirteen were conducted abroad," Putin said.
Last year, Russian companies accounted for 18% of total turnover on the London Stock Exchange. This, in Putin's opinion, means that Russian businesses are of real interest to global investors, although it is also a signal that Russian companies are being forced to seek funds for development on foreign markets and are not yet considering their own stock market as a comfortable, beneficial source of capital.
"Why did we merge two exchanges? We merged them, and so what? All of our main companies, including those with government participation, are trying to find money abroad. Our task is to make the Russian stock market competitive in the full sense of the word, attractive for Russian and foreign participants," Putin said.
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