Russia's SPB Exchange plans to expand trading in Chinese shares

By Alexander Marrow

MOSCOW (Reuters) - SPB Exchange plans to offer trading in more than 500 Hong Kong-listed Chinese shares in 2023 and expand to markets such as India, Brazil and South Africa, the head of Russia's second-largest bourse said on Thursday.

SPB, which specialises in trading foreign shares, has seen a 28% jump in registered clients this year, but volumes are around three times lower, it said in a presentation.

The central bank in July estimated that around 6 trillion roubles ($93.4 billion) of foreign shares held by Russians had been frozen after Western sanctions and Russian restrictions, including bans on trading foreign shares, levied in response.

Like many Russian companies seeking alternative, "friendly" markets, SPB hopes to offer trading in Uzbekistan, India, Brazil, Mexico, South Africa and other developing countries.

But SPB CEO Roman Goryunov acknowledged that geopolitical uncertainty made giving a specific timeline impossible.

"Everything is changing so quickly that a correct plan for the year by the quarter seems simply utopian," he said.

"We are talking about jurisdictions with a large quantity of restrictions," Goryunov told reporters, listing the movement of capital, tax and foreign investor rights as examples.

The exchange has so far paid $120 million in dividends and coupons on frozen shares, Eurobonds and other assets, he added.

LISTING RUT

Following its own initial public offering (IPO) in late 2021, SPB had planned to draw some Russian listings away from its dominant competitor MOEX Group, but the market has been deprived of Western investors since Moscow sent troops into Ukraine in February.

E-scooter firm Whoosh staged Russia's only IPO of the year on Wednesday, but raised less than originally hoped.

"If the liquidity and capacity of a market is decreasing ...then, naturally, counting on successful placements is quite complicated," Goryunov said.

The circle of investors is narrowing and the prospect for placements is compounded by limited corporate and macroeconomic disclosures, Goryunov added, making valuing assets challenging.

Russia's central bank ordered banks to limit disclosures in light of Western sanctions and has stopped publishing some data.

($1 = 64.2500 roubles)