Sistema's London listing is biggest Russian IPO

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The Independent Online

Sistema, the Russian mobile phone conglomerate, was officially admitted to the London Stock Exchange (LSE) yesterday in the largest Russian initial public offering anywhere in the world.

The president of Sistema, Vladimir Evtushenkov, was at the LSE's headquarters in Paternoster Square to open trading, alongside Clara Furse, the LSE's chief executive.

Investors can now openly trade in global depository receipts, securities that represent Sistema shares which have their primary listing in Russia. These receipts closed up nearly 3 per cent at $17.85 (£9.45) yesterday, 5 per cent higher than the price they were placed at on last Wednesday when conditional trading began.

Sistema raised $1.35bn last week by placing 17 per cent of the company in London. It is the biggest float in London by an international company since Orange in 2001. On Friday, investors who missed out on the original placing could take up additional receipts placed on the market. Sistema released an extra 12 million receipts, taking the free float to 19 per cent.

Sistema, whose businesses range from telecoms to banking, retail and property, has a market capitalisation of $8.6bn but as its primary listing is in Moscow, it will not enter the FTSE. Mr Evtushenkov's stake is worth more than $5bn.

Ms Furse, who is defending the LSE from a possible takeover by the German stock exchange, used the Sistema float to trumpet the quality of London's capital markets. Ms Furse said: "We are delighted that Sistema has chosen London for its second listing outside Russia. The capital raised in this IPO demonstrates that London's markets provide an excellent gateway to international capital, with world-leading regulatory and corporate governance standards."

She said many more Russian companies were interested in listing in London, adding to the 13 on its main market. Trading in Russian stocks through London is becoming increasingly active - the LSE said its members traded $64bn of Russian stocks in 2004, a 76 per cent increase on 2003.