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The London Stock Exchange (LSE.LN) remains the choice destination for international listings of Russian firms, according to a survey of analysts conducted by business consultancy Merlin.

The survey of 17 analyst showed the LSE is the top choice, followed by the Hong Kong stock exchange, NYSE Euronext (NYX) and then Deutsche Boerse AG (DB1.XE).

The LSE "will continue to be the international market of choice for Russian companies over the next 12 months. Recent defections from New York Stock Exchange, such as Tatneft, underline the fact that maintaining a listing in London continues to be cheaper than in New York," said Andrey Kuznetsov, Market Strategist at Russian investment bank Troika-Dialog.

"Some Russian companies are looking at the ongoing initial public offering of Rusal in Hong Kong. If this proves to be highly successful, in the future Hong Kong may become another popular destination for Russian IPOs," Kuznetsov said.

Most of the analysts surveyed said they expect international listings by Russian companies to rise this year and return to levels seen before the financial crisis.

Last year, only one Russian firm listed outside the country. In 2008, four Russian companies listed overseas and raised $941 million. In 2007, 20 international listings raised $20.2 billion and in 2006, 22 international listings raised $17 billion.

The analysts, on average, also expect the Russian stock market to rise by 24% this year.

Credit Suisse EMEA equity strategist Robert Ruttman said there are four factors which should support the recovery of the Russian equity market.

The first is rising global demand for oil and falling global oil inventories. Second, Russia's corporate earnings growth is expected to exceed 30% this year and next year. Third, Russia's forward price-to-earnings valuation multiple of 8 trades at a 35% discount to the average among emerging markets. And fourth is Russia's relatively low interest rates compared with some countries and expectations that inflation will remain benign this year.

-By Vladimir Guevarra, Dow Jones Newswires; +44 (0) 2078429486, vladimir.guevarra@dowjones.com

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