Of three planned Russian company IPOs anticipated in early February, metals company Polymetal and tech equipment supplier Sitronics closed the first day of trading below their offering price—despite pricing at the bottom of the range—and one, GV Gold, was postponed. Investors are clearly becoming more selective about Russian offerings, suggesting that state banks Sberbank and Vneshtorgbank, which hope to raise a total of around $15 billion in offerings later in the first half of 2007, may face an uphill battle. Another $15 billion in fresh stock is in the pipeline for 2007, although the continued anemic appetite for Russian IPOs bodes ill.
Defense minister Sergei Ivanov announced a $189 billion overhaul of Russia’s military, a move widely interpreted as evidence that Russia intends to expand its military influence. A few days later, President Putin said US military policy had the impact of encouraging other countries to seek nuclear weapon technology, as the recent downswing in US-Russia relations continued.