WASHINGTON, D.C., Oct. 2- The International Finance Corporation (IFC) today signed agreements to provide US$10 million of loan and equity finance to Troika Dialog, one of Russia's leading securities companies. Troika Dialog will use the financing to expand its brokerage and market-making activities.
Foreign investor interest in Russian equities has increased sharply in the last year as a result of rising confidence in Russia's economic stability. The increase in demand for equities has given rise to increased working capital finance requirements at most Russian securities companies.
"IFC's investment in Troika Dialog will serve to broaden and institutionalize the firm's sources of funding in order to meet an increasing demand for brokerage and market-making services and, in the longer-term, develop into a leading provider of retail financial services," said Edward Nassim, Director of IFC's Europe Department. "IFC regards Troika as a model which can serve to lead the development of the securities industry and improve liquidity, efficiency and market practices."
"We believe that securities firms can play a crucial role in developing Russia's financial sector by providing liquid markets for shares of the largest privatized companies; channeling foreign portfolio and direct investment to Russian enterprises; and developing the market for primary share issues," added Ruben Vardanian, President of Troika Dialog. "We are excited that we can help fulfill this role."
Present at today signing were, Edward Nassim of IFC; Cesare Calari, Manager, Capital Markets, Europe Department, IFC; Peter Derby, Chairman, Troika Dialog; Ruben Vardanian, President, Troika Dialog; and Pavel Teplukhin, Chief Economist, Troika Dialog.
IFC has been active in Russia's capital markets since 1993 when the Corporation began to provide technical assistance to develop the legal and regulatory framework. More recently, IFC has become involved in the support of key market institutions designed to strengthen industry segments and have a demonstration effect. In 1995, IFC, with the Bank of New York, Unexim Bank, NIKOil and EBRD, sponsored the establishment of the first independent share registry to operate to Western standards and systems, the National Registry Company. Earlier this year, IFC approved an equity investment in Pioneer First Russia, manager of First Investment Voucher Fund, Russia's largest voucher fund, and one of the first managers licensed to operate domestic mutual funds. IFC will continue to support the development of the securities market and is working on a number of projects to strengthen the banking sector.
Troika Dialog, which was founded in 1991, is an active trader in government and corporate securities and provides clients with financial advisory services on mergers and acquisitions, the issuance of equity and debt, and structured investment. Troika Dialog has been among the most active dealers in Russian equities and has been rated the first among other market participants by AK&M, an independent Russian rating agency. In July 1996, Troika Dialog was cited by Euromoney magazine in its Awards for Excellence as the best domestic securities firm in Russia.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
