Goldman eyes Russia, seeks dealer permit - sources
Wed Feb 1, 2006 10:54 AM ET
By Guy Faulconbridge
MOSCOW, Feb 1 (Reuters) - Goldman Sachs <GS.N> will apply for a licence to trade securities in Russia as top investment banks flock to profit from the country's soaring markets, bankers and officials told Reuters on Wednesday.
Goldman, one of Wall Street's most influential banks, plans to expand in Russia and has had talks about getting a broker and dealer licence in the country, a source close to the situation told Reuters. A spokesman for Goldman declined to comment.
"There have been talks about a broker-dealer licence with Goldman," one source in Russia's Federal Financial Markets Service, the equivalent of a securities commission, said.
Traders in Moscow said they had been approached with job offers by several major banks, including Goldman Sachs.
Flights to Moscow are full of bankers and hotels are booked out as U.S. and European banks seek to boost sales and trading to take a slice of Russia's bull markets and bulge of initial public offerings.
Many senior bankers vowed never to come back to Russia after the government's default on domestic debt in August 1998 sent a wave of volatility through markets, losing top banks billions as trades unravelled across the globe.
But since then, a seven-year economic boom, driven by high oil prices and breakneck growth in the consumer sector, has flooded the country with money and filled government coffers.
With record syndicated loans and rumours of major mergers and acquisitions, top banks are scrambling back.
Citigroup Inc. <C.N>, ING <ING.AS>, Credit Suisse <CSGN.VX> Morgan Stanley <MWD.N> and Dresdner, a unit of Allianz <ALVG.DE>, have expanded Moscow trading operations. Deutsche Bank <DBKGn.DE> is buying local investment bank United Financial Group.
They join Moscow veteran UBS AG <UBSN.VX>, which has long had sales and trading in Russia and weathered the 1998 crisis.
One investment banker said that Goldman's push into Russia, together with Citigroup's aggressive expansion, posed the greatest threat to players such as Deutsche, Morgan Stanley and Credit Suisse who dominate the lucrative Russian IPO business.
RUSSIAN GOLD
Goldman, founded in 1869 by German immigrant Marcus Goldman, has grown to be one of the most influential banks in the world, advising governments and gaining a reputation for shrewd trades.
But its relationship with Russia has been as volatile as Moscow's financial markets, currently on the longest bull run since the fall of the Soviet Union. Russian stocks have doubled over the last year and daily turnover has hit over $2 billion.
Many fear the market may have soared too high and point to the unpredictability -- and severity -- of the Russian Bear.
Goldman advised Russia as the Soviet Union crumbled but cut back in the mid-1990s. It stepped up its presence again with a high-profile party in June 1998 -- whose guests included U.S. ex- President George Bush -- just months before markets crashed.
Goldman helped the Russian government sell Eurobonds before the 1998 crisis and since then has been involved in major deals, advising TNK shareholders on the sale in 2003 of a 50 percent stake for over $7 billion to BP Plc <BP.L>.
The bank helped to arrange a record $13.1 billion syndicated loan last year to fund Gazprom's <GAZP.MM> takeover of oil firm Sibneft <SIBN.RTS> and is an adviser to Russia's No. 2 bank, state-owned Vneshtorgbank, on a $2 billion stock flotation planned for this year.
Goldman last year held takeover talks with Aton, an independent Moscow brokerage, but the two sides couldn't agree on terms, sources told Reuters at the time. (Additional reporting by Alistair MacDonald in London) |
