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EBRD and RDIF Buy into Russia’s MICEX-RTS Exchange

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The press release states, “The EBRD and the Russian Direct Investment Fund (RDIF) have agreed to acquire a 6.29 percent and 1.25 percent stake respectively in Russia’s MICEX-RTS stock exchange. The investment is part of a long-term strategy to promote the development of local capital markets in Russia and broaden the regional and international appeal of this recently unified exchange.

EBRD and RDIF’s equity investment supports Russia’s goal of transforming Moscow into a globally important and competitive international financial hub. This investment breaks new ground for the Bank as this is the first time the EBRD has invested in a trading exchange in one of its 29 countries of operation. For the RDIF, the transaction represents its first investment only six months after being established.

The RDIF, established in 2011 under the aegis of the Russian government, is a USD 10 billion investment fund that seeks to maximize returns by making investments in the leading companies of fast-growing sectors across the Russian economy, investing in partnership with leading financial institutions and corporations.

“The turmoil in the world economy gives added urgency to the need to strengthen and deepen Russia’s capital markets so that they can provide the liquidity which the domestic economy needs to access and the creation of a unified exchange represents an important milestone in that process,,” said the EBRD’s Varel Freeman.

“Through this investment, the EBRD hopes to contribute to increasing the attractiveness of MICEX-RTS so that it becomes the preferred exchange for Russian issuers and traders, as well as investors with an appetite for Russian stocks and other financial instruments,” Mr. Freeman added.

“This transaction verifies RDIF’s core mission of attracting investment capital to support market-leading Russian companies. In addition, this investment is an important building block in strengthening Moscow as an international financial center. The RDIF can now fully leverage its extensive relationships with sovereign wealth funds and other leading investors to pursue additional pre-IPO investment in MICEX-RTS and to further improve its IPO prospects,” said Kirill Dmitriev, Chief Executive Officer of the RDIF.

“We are excited to welcome these new shareholders of the biggest Russian exchange. This investment proves that the reforms that are being implemented in Russia contribute considerably to creating and promoting a favourable investment climate that attracts high-calibre financial investors. This is a vital factor for building in Moscow an international financial centre,” said MICEX-RTS’s President, Ruben Aganbegyan.

“The presence of such prominent institutions among the shareholders also shows that the exchange pursues best practices, meets the highest international standards and has significant growth potential. We thank our new shareholders for their confidence in our company and look forward to doing business together,” Mr. Aganbegyan added.

The EBRD’s stake will give the Bank the right to nominate a candidate for election to its 19-strong Board of Directors, a body which determines the exchange’s development strategy and agrees listing and reporting standards.

Russia’s stock market is the most developed in the Commonwealth of Independent States (CIS). MICEX-RTS presents itself as one of the top-20 global securities exchanges in terms of trading volume, as well as one of the top-10 global futures and options markets as regards derivatives, again as measured by trading volumes.”

Read more: RDIF Press Release

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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