Market listing trend data confirm the growing Russian presence in London
Figures released yesterday show clearly that the trend for Russian companies to list in London rather than Moscow continues: Russian stock trading in London has outpaced volumes in Moscow for 13 straight months, with the gap reaching a three-year high of 50% in August, according to data compiled by Bloomberg.
In a classic example of saying nothing with conviction, two Russian companies tried to ‘explain’ this odd situation. Polyus Gold International Ltd. said it moved to London to gain access to foreign investors, while OAO Phosagro sees a primary listing in the U.K. capital as its “ultimate goal.” As to the first, why not the NYSE? Euronext? Berlin? And as to the second, er, why?
One source says that “an increasing number of the nation’s biggest businesses prefer to list their shares overseas to avoid trading halts, local currency swings and regulations that are less stringent than Europe’s”. Right. So to avoid currency swings, we’ve moved to London. I’m thinking of moving to Manchester to avoid the rain myself. Less stringent regulation is also code for Plod incompetence and ignorance.
There are a number of real reasons why the trend is accelerating. As The Slog revealed in an exclusive piece last June, the detection of techno-naughtiness is in its infancy in the UK. While the Russian Establishment has made itself expert in cyber attacks and prosecution of wrongdoing on the Web, the Metropolitan Police are, to be kind about it, clueless.
Second, London has more blue-chip listings and market leaders than anywhere else. While in theory, blagging confidential information can be done from any distance – as the Chinese prove on a daily basis – the importance of recruiting employee renegades to place the software in the right pc or mainframe remains of paramount importance to the Russian psyche. (Half of the bad guys involved in this incredibly undetected trade are ex KGB: so recruitment is their forte).
Third – and a matter of some urgency – Vladimir Rasputin is set to return to the top job next March. While Medvedev is fairly relaxed about cyber-espionage – he has made finance a cornerstone of his plan to diversify the economy – the cop in Putin remains very keen to restore at least some semblance of law and order to Russian life. He is, I am told, giving notice that a huge chunk of the country’s cyber development budget will be refocused on domestic crime rather than stealing foreign sovereign secrets.
What London offers market direction and data blaggers is the freedom to ply their trade, and a large pool of big salmon in which to fish without a licence. Lest we forget, most of these thugs work for listed companies themselves: sure, they make money on the side – big money – from inside information that leads to insider trading. But primarily, their corporate employers are interesting in blocking off the opposition, and knowing what price to offer for stuff.
In terms of both defence and attack, Britain lags years behind in the business of cyber crime and espionage. One can only hope that Theresa May is giving some thought to this, as she nods off in the Mancunian Gmex centre today.