LUKoil delays Hong Kong listing to 2013

LUKoil, Russia's second largest oil company, has postponed its Hong Kong listing to 2013.

The oil major, which is also the world's second largest public company, said the delay was caused by legal restrictions. President Vagit Alekperov said the company has been faced with a number of legal complications concerning the Hong Kong listing.

This, he said, was ". . . due to an agreement that curbs placement of Russian companies on the Hong Kong stock exchange. For now, we are monitoring the process."

LUKoil already has a secondary listing in London and was looking to list existing shares worth more than US$1 billion in Hong Kong in 2012. Analysts said that companies aiming to increase their profile among Asian investors see a secondary listing or listing by introduction in Hong Kong as less expensive than an IPO.

This approach has its drawbacks, however, one of which it that because there is no new issuance of stock, trading volumes tend to be thin, limiting their listing's appeal. Some bankers say the practice of listing without issuance of new shares is an expensive marketing exercise.