Date: Tue, 31 Jul 2007
From: "Nicolai Petro" nnpetro@gmail.com
Subject: Re: 2007-#165-32 (Petro replies to Ian Hague)
Dear Ian,
Thanks for your well reasoned comments.
A year or two ago, I would have agreed with you that Russian companies benefit much more from the reputation of the London Stock Exchange than the LSE does from such placement. Now that successful placement of multi-million dollar Russian IPOs has become fairly routine, however, I suspect that the tide has turned and that global investors will follow Russian stocks wherever they are listed.
Certainly, for both geographical and cultural reasons, Russian companies would prefer to have their primary listings in Western Europe. But this longing to be recognized as part of the European family ("our mother" Dostoyevsky called Europe) will not stand in the way of profits if, for political reasons, investment there is made more difficult. The primary beneficiaries of this will be the Asian markets, and the LSE will suffer both in assets and reputation.
I recall that a similar type of argument was made with respect to Shtokman; i.e., that since Russia cannot do without Western technology and investment, Western companies have the leverage in negotiating with the Russian government. We all know how that turned out.
With best wishes,
Professor Nicolai N. Petro
Department of Political Science
Washburn Hall, University of Rhode Island
Kingston, RI 02881 (USA).