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Western investors "all looking at Russia", claims Nasdaq boss

0 7 December 2013

Just over a month ago the Moscow Stock Exchange signed an agreement of cooperation with NASDAQ OMX. Now the American Stock Exchange will advise Russian technology companies and international organisations that do business in Russia, including how to prepare for their IPO. Given the excitement of many Russian companies surrounding this announcement, the results could be interesting. Senior Vice-President of the New York Stock Exchange Adam Kostyal talked to’s Daria Maslova about what Russian companies should expect if they choose NASDAQ.

How are Russian business ventures viewed by New Yorkers?

You know, all the eyes of Western investors are today directed at Russia. It cannot be denied that there are several other attractive, prospective markets comparable with your country, but nonetheless, everyone is interested in Russia.

Which companies are the most interesting to an American investor?

American investors are interested not so much in the local and regional, as much as those businesses that are scalable. Such businesses draw a lot of attention from prospective investors. Business in my mind is more than a company simply operating in one market. An example of this can be seen in the success of “Yandex” in Turkey.

But I’m not sure that “Yandex” will find the same success in the US…

But the fact is that they shouldn’t. It’s enough for them to become more than just a successful Russian project. I’m not sure that American investors are looking for original ideas; rather they are interested in businesses that can scale globally.

Are today’s Western investors really not interested in finding new ideas?

That’s not what I mean. The main thing is that the idea has come to something and, once again, that it can be scaled. A good example of this is Avito; Swedish businessmen have taken a model which was already successful in Europe and taken it to a higher level. Today “Avito” has found success in many countries, including Russia. If you have a truly unique idea, it adds value, but it is not a necessity. It is important to have the talent to be able to convince investors that your project could be sold in Asia, that it could be successful in the CIS countries. It is not necessary to go and conquer the US.

In your opinion what is the secret to the success of Qiwi’s IPO?

Incidentally, I’m not sure that this was a unique idea but it was an idea that was brilliantly realised thanks to a strong team, a stable business and profits. When I say that all eyes are now fixed on Russia, I mean that Russia is a huge retail market with great potential and also there are several markets that depend on Russia and which offer big opportunities that someone has to go out and take.

Do you meet with small businesses and startups here in Russia?

I represent the NASDAQ Stock Exchange and am not myself a venture capitalist in search of projects for investment. I’m interested in how dynamic the Russian financial market is today, and how new companies such as “Qiwi” and “Yandex” reach the level that they do.

Can you compare Russian public companies?

I’m sure that “Yandex” and “Google” are companies on an equal level, but “Yandex” is nevertheless a notch higher in terms of a level of maturity. “Yandex” for a long time has been not just a public company with strong management but a listing on NASDAQ. The company became part of the world financial system, also investing in eco-systems and industries. Generally a local technological sector doesn’t really exist because by definition, the sector is global. Technological companies provide services directly for customers who need them in Russia as well as in the US and other countries. Only Russian companies are operating less in the developed market.

What do you think distinguishes the entrepreneurial culture of our country?

In America when finishing university students feel that they want to be entrepreneurs. They don’t dream of becoming account managers, they want to set up their own businesses. Those who feel that they themselves have the spirit of entrepreneurialism, also find support in their surroundings, where their dreams can be realised. I haven’t talked about the Valley yet – generally there is there a feeling of confidence that the market needs their ideas, moreover that they will find commercial success, because they will be essential to financial institutions.

The great thing that the Valley does is that puts so many ideas out there, on the market where they can find consumers and investors. This is lacking in Russia. People need to feel that they can fulfil their potential, that their ideas can become a reality. That’s why cool exchange programs and support from the state and investors are so important.

How can Russian companies attract American investment?

Well, firstly, many of them are already successfully doing that. Listing on NASDAQ is an excellent way to increase a company’s liquidity in the US. For American investors choosing their investments, the listings by the American Stock Exchange display global companies. In America, there are investors and funds, clearly aimed at investing only in technological companies, whose stocks are listed on NASDAQ.

What advice would you give to Russian entrepreneurs?

First of all, I would recommend that they take advantage as much as possible of the partnership between the Moscow Stock Exchange and NASDAQ. We really want to help regional markets and technological companies develop worldwide – I share this position: you either see a small world and try to divide it up, that is, you divide a small pie, or decide that the whole world could benefit if the pie was bigger. I prefer the global option. 


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