MOSCOW, March 2 (RIA Novosti) - The upward trend in the number of Russian companies listed on foreign stock exchanges will persist after 2006, audit and consulting company Ernst & Young said Thursday.

Paul Murphy, head of E&Y's Transaction Support unit, said Russia and other former Soviet republics had attracted about $9 billion in IPOs last year, and this figure could double in 2006, considering the number of scheduled listings.

The trend will remain in place in the next few years, though investors will be more selective, and their estimates tougher, Murphy said.

He warned that Russian companies would have to compete with businesses from other developing countries on Western stock exchanges, and their relevant indicators would play a serious role in this competition.

Murphy said the high demand for Russian shares among foreign investors hinged on many factors, including the country's vast consumer market and high returns on investment as compared to Western businesses. He said Russian companies' popularity also stemmed from the opportunities in the mining sectors and diversification of investment portfolios with a focus on new markets.

According to Murphy, companies based their choice of the IPO market on its liquidity, sectoral structure, geographic location, corporate management requirements, potential investors and IPO deadlines.

Murphy said world market regulations were being tightened, and cited the American Sarbanes-Oxley Act of 2002, which provides for criminal liability of company chief executives for fraud and false reports about the corporate performance. However, he added this did not stop Russian companies from entering international capital markets.