Russian firms plan Hong Kong listings as president visits

17th April 2011, Comments 0 comments

Russian President Dmitry Medvedev became the first Kremlin chief to tour Hong Kong Sunday, seeking fresh investment as aides and executives signalled a rise in Russian listings in the city.

Medvedev led a business delegation to the Chinese financial hub as he seeks to diversify Russia's economy beyond oil and gas and entice more foreign capital into what he has called a "very bad" domestic investment climate.

He held talks with Hong Kong's Chief Executive Donald Tsang and visited the stock exchange, where his top economic adviser told reporters four to five Russian companies were considering Hong Kong listings.

Arkady Dvorkovich said these included electrical supplier EvroSibenergo.

Tsang earlier described the first two Hong Kong listings of Russian firms -- aluminium producer United Company RUSAL and IRC, an iron ore subsidiary of miner Petropavlovsk, both floated last year -- as a "breakthrough".

Medvedev said he also wanted to tap into Hong Kong's financial expertise and told Tsang at a working breakfast that he saw the former British colony, long listed among the world's most open economies, as a model for Moscow.

"Hong Kong's experience is extremely indicative for us," he said.

"We must lift excessive administrative barriers -- Hong Kong's experience in this aspect could be used in our country... (and) could also help to establish a global financial centre in Moscow."

But his travelling companions hit a note of scepticism, with Alexander Voloshin, head of a working group on a new Moscow financial centre, telling reporters: "We will hardly be able to be as liberal as Hong Kong."

Critics say Moscow has failed to tackle endemic red tape and corruption, while Medvedev last month said graft had the country "by the throat" and announced a raft of new measures to entice foreign investment.

These included a $10 billion fund in partnership with private equity firms, which he said Sunday would launch in early summer.

Tsang told the Russian leader bilateral trade had grown in 2010 by a "remarkable" 63 percent, and highlighted Hong Kong's fledgling market in yuan-denominated bonds after Russian state bank VTB issued so-called "dim sum" bonds last year.

"Russian firms can use Hong Kong as a stable and efficient platform to settle... trade in renminbi," Tsang told Medvedev.

Medvedev was also aiming to persuade Hong Kong-based investors to take part in the development of a high-tech hub outside Moscow which is planned to become Russia's answer to Silicon Valley, the Kremlin said ahead of his visit.

He arrived in the former British colony, handed back to China in 1997, from the southern Chinese island province of Hainan, where he held talks with fellow leaders of top emerging economies China, India, Brazil and South Africa.

Russia has sought to align itself more closely with China in recent years as it seeks to unlock new energy markets in Asia. This is Medvedev's third visit to the country since he became president in 2008.

© 2011 AFP

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