IPO pipeline in Russia, CIS to bounce after Q1 dive

MOSCOW, April 9 (Reuters) - The pipeline of initial public offerings (IPOs) from Russia and other former Soviet states is set to regain momentum later this year after contracting sharply in the first quarter, a survey released on Wednesday said.

IPOs from Russia and the Commonwealth of Independent States (CIS) raised $566 million in the first three months of 2008, against $10.58 billion in the same period last year, said the survey by strategic and financial communications consultant PBN.

It said the global credit crunch and political uncertainty in Russia ahead of the March presidential elections held up the flow of public stock offerings in the region, which raised a record $34.3 billion in 33 IPOs last year.

"With the presidential succession (in Russia) settled, the pipeline for IPOs remains strong," Peter Necarsulmer, chairman and chief executive of PBN, said in the survey.

"However, it appears that many are aiming for a third or fourth-quarter offering at best, in the hope that the investment environment will be more benign by then. We do not expect to see much upturn in the remainder of the first half."

The first quarter of 2008 saw two IPOs in the region -- by Russian electricity producer TGK-7 (VTGK.MM: Quote, Profile, Research), which placed $466 million in Russia, and Kazakh oil and gas producer ZhaikMunai (ZKMq.L: Quote, Profile, Research), which placed $100 million in London.

This compares with five IPOs in the first quarter of 2007 that raised $10.58 billion, the PBN survey showed.

This figure, however, was inflated by the mammoth share sale of Russia's largest lender, Sberbank (SBER03.MM: Quote, Profile,Research), which raised $8.8 billion in February and was the world's biggest public offering in 2007.

Even discounting this one-off event, the amount of IPO capital raised in Russia and the CIS during the first quarter has fallen by around 70 percent year on year.

"One side-effect of this pause is that we expect to see an increase in interest in strategic stake sales and other M&A activity as companies seek alternative routes for growth or exit," Necarsulmer said. (Reporting by Simon Shuster; Editing by David Hulmes)