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Get In on the Next Hot Russian IPO

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Did you miss out on the beaucoup profits at NYSE Euronext (NYSE: NYX  ) , when Germany offered to buy America's premier stock exchange? Did you neglect to deposit $100 million at a major investment bank running the Yandex (Nasdaq: YNDX  ) IPO, secure for yourself "favored client" status -- and a bundle of shares at the $25 offer price -- and book a 55% profit at the end of the first day of trading?

Well don't lose heart, young investor. There's still a chance to make a bundle on the stock market -- and the Russian stock market in particular.

Two great tastes that taste like borscht together
Earlier this year, MICEX and RTS -- the two major stock exchanges in Russia -- announced that they will merge. The move's widely seen as being part of a Putin plan to bolster Moscow's role as an international financial center. But Kremlinology notwithstanding, MICEX's merger with RTS appears to offer investors who missed out on Yandex a second bite at the Russian apple. (Beet?) 

Right now, MICEX is in the process of buying out RTS's five biggest shareholders, preparatory to implementing the merger early next year. Once the merged company is ready for prime time, MICEX plans to proceed to IPO the exchange in early 2013.

Should you buy?
Everything depends on the IPO price, of course, but assuming the price is right, I'd have to say "da." Financial numbers on MICEX are difficult to come by, but Capital IQ reports that RTS, at least, earns something on the order of 38% net profit margins on its $110 million in annual revenue. Compare that with the circa-14% net margins at NYSE Euronext and Nasdaq OMX (Nasdaq: NDAQ  ) , and there's no doubt about it: This IPO could be a contender.

What has Russia's most famous -- and most successful -- IPO been up to lately? Add Yandex to your watchlist and find out.

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Fool contributor Rich Smith spent half a decade working in Russia, but he does not own (or short) shares of any company named above. Motley Fool newsletter services have recommended buying shares of NYSE Euronext. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Related Tickers

5/25/2012 4:00 PM
YNDX $20.45 Up +0.17 +0.84%
Yandex, N.V. CAPS Rating: **
NYX $24.47 Down -0.03 -0.12%
NYSE Euronext CAPS Rating: *****
NDAQ $22.06 Up +0.26 +1.19%
Nasdaq Stock Marke… CAPS Rating: ****

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