The second quarter was for investment banks operating in the Russian market, the worst for the last two years. According to the company Refinitiv, their fee income totaled $54 million, of which about half has brought the debt capital market. Russian issuers took advantage of favourable conditions on the debt capital market on the background of a “reset” of the rates by leading Central banks. However, bankers expect the growth and activity of issuers in the fall.According to “Kommersant”, based on the data Refinitiv, at the end of last quarter, investment banks earned only $54 million, more than twice less compared to the second quarter of 2019. Less bankers earned in the fourth quarter of 2018. Then, on the background of the expansion of us sanctions against Russia Commission was less than $28 million For the first half of the Commission the investment Bank made $of 144.7 million, 19% lower than the same period in 2019.commissions received in the second quarter investment bankers from transactions in the Russian rankopedia Commission occurred in almost all areas of investment banking. According to “Kommersant”, in the second quarter more likely (three times) decreased revenues from mergers and acquisitions (M&A) to $10.7 million Comparable decrease occurred in the segment of syndicated lending, where banks earned just over $8 million mergers and acquisitions traditionally carry higher risks and regulatory requirements. “In the face of uncertainty performance indicators of these projects deteriorate, which affects their implementation by the banks,”— said the head of sales investment products ICD Rita Midterm.20% decrease in reward for transactions on the equity capital markets to $13.6 million during this period, according Refinitiv was held only four SPO, the largest of which was the placement of shares of Yandex at $460 million “in Addition to several secondary offerings greater support in maintaining the Commission has had a buyback program of Russian companies,”— said Rita Midterm. “The equity capital markets point, the valuation of Russian companies are at low levels, in this regard, the activity of newcomers and issuers in the market in recent years is low,”— said the Deputy Chairman of the Board of Sovcombank Mikhail Avtukhov.During the quarter, their fee was $22.1 million, 1.5 times more than last year. According to “Kommersant”, during this period there have been 31 deals worth $7.7 billion to maintain a high activity of issuers was facilitated by the steps leading Central banks to lower rates. In March, the fed has twice reduced the rate in the amount of 1.5 percentage points, to 0-0. 25%. The Bank of Russia in the second quarter lowered the interest rate by 1.5 percentage points, to 4.5%. “Thanks to the almost zero rates and other measures of support from regulators there was a decrease in the cost of borrowing for issuers,”— said the first Vice-President of Gazprombank Denis Shulakov. “On the one hand, issuers tried to take advantage of strong market conditions on concerns and crises, with the other investors received support in the form of monetary policy”,— said Mikhail Avtukhov.Recovery in investment banking activity will be directly related to overcoming uncertainty in terms of completion of the pandemic and the vaccine, as well as the pace of economic recovery, says Rita Midterm. An important role in the activities of investment banks is played by the normalization of the situation on the secondary market. According to co-Director of the Department of investment banking in global markets “VTB Capital” Alex Metherell, remote work, the development of the online component of companies ‘ activities have accelerated changes that will have an impact on the economy, capital markets and create a favourable environment for mergers and acquisitions. “The preparation of a large number of transactions in the equity capital markets, many issuers can enter the market already this autumn,” he said. The recovery in the M&A market traditionally occurs later than the recovery of markets for debt and equity. But, says Mr Metherell, given the activity on the securities market “can be expected to increase transactions in the sector of mergers and acquisitions.”Vitaly Gaydayev
