Surging oil prices and warming relations with the US have boosted the value of Russian stocks, earning the country a spot as one of the best-performing global markets in 2016. There’s growing investor confidence in the country’s financial position—and a toy store has become the unlikely beneficiary, and an early leader in Russia’s economic resurgence.
Detsky Mir (“Children’s World”) debuted on the Moscow Stock Exchange Feb. 10, marking the country’s first initial public offering of the year. The children’s goods retailer raised $355 million in its IPO, leading to a valuation of almost $1.1 billion.
Russia is still straggling out of a two-year recession triggered by the country’s annexation of Crimea in early 2014. In that time, investors have been turned off by the country’s high interest rates and currency collapse. But the Detsky Mir IPO—the country’s biggest since Russian retailer Lenta raised $952 million in 2014—is a a sign financiers are regaining confidence in the Russian market.
Shares of Russia’s largest toy store were initially offered at 85 rubles per share; by the end of the day, the price had gone up 6% to 90 roubles ($1.53), which Reuters says indicates ”cautious interest” from investors, perhaps tempered by western sanctions. At least 90% of the company’s shares were bought by foreign investors. By the end of the day on Monday, the share price was back to 85 roubles.
In its nearly 500 stores, Destky Mir sells toys, car seats, baby essentials, clothing, school supplies, among thousands of other essentials you would likely find at a Toys “R” Us. The Moscow-based, 70-year-old brand said in January 2017 that it expects to double its share of the children’s goods market over the next few years, and has plans for at least 250 more retail locations.