Rusal listing breaks the ice

The Hong Kong listing of Russian aluminium producer UC Rusal Ltd. opens up a compelling option for Russian companies that have traditionally sought to go public in London, Rusal’s deputy chief executive Artem Volynets has said.  Seeking a Hong Kong listing, he added, “is a no-brainer decision” for Russian resource and raw-materials companies, pointing to Hong Kong’s deep liquidity, its proximity to China’s economic growth and the promise of richer valuations.

The path to Rusal’s Hong Kong listing was far from smooth. The company’s approval hearings were held up by concerns over the heavy debt obligations, as well as corporate-governance questions surrounding Chairman and Chief Executive Oleg Deripaska. After several false starts, securities regulators signed off on the listing but barred individual investors from subscribing to the deal.

Mr. Volynets attributed the share-price weakness to market disappointment at recent earnings figures from Rusal’s rivals, as well as concern about China’s efforts to slow down economic growth.

Officials for Singapore’s stock exchange, sensing an opportunity, have sent executives to Moscow in hopes of attracting listing candidates. Stock-exchange operator Hong Kong Exchanges & Clearing Ltd. has been eager to attract listings beyond its traditional base of Hong Kong and mainland Chinese companies. It has sent its own executives to a number of developing countries, including states of the former Soviet Union. Rusal is one of its highest-profile catches yet.