Russian Federal Financial Markets Service chairman Oleg Vyugin has warned stock placement organizers that they will not be able to buy more than 20 percent of the issue.
Photo: Vasily Shaposhnikov
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Feds to Reimpose Stock Purchase Limit
Chairman of the Federal Financial Markets Service Oleg Vyugin plans to restore earlier limits on purchases of stock and securities issues by organizers of the placement. Vyugin said that organizers will not be able to buy more than 20 percent of a placement, which will reduce manipulation of the stock market. The rules will be in place again before the end of the year. He made the announcement at the Russian Economic and Financial Forum, now going on in Zurich.
Deputy head of the investments bloc of MDM Bank Nikita Ryauzov noted that it is almost unknown for the organizers of an initial public offering to buy 20 percent of an issue. “To buy such a large package would unambiguously mean that the placement was a failure,” Ryauzov said. “Therefore, the prohibition will concern mainly the placement of securities.”
“Such limitation do not make specialists in the debt market happy,” noted Alexey Denisov, director of the Sobinbank investment department. “The borrower itself suffers, especially with bad market conditions. His debt is either not bought fully or bought at very high interest.”
Senior vice president of Svyaz Bank Konstantin Saprykin noted, however, that “organizers of placements will find schemes to get around the prohibition” fairly easily. Even now organizers of stock issues make agreements with friendly or affiliated organizations.
www.kommersant.com
All the Article in Russian as of Mar. 20, 2007
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