Russia’s stock market could take over from the banks as the principal source of corporate finance in Russia in the near future, according to the head of Federal Financial Markets Service, Vladimir Milovidov.

Last year Russian firms raised 30% of their capital through the stock market compared with the 70% they borrowed from banks and other sources.

This year, he says, the global liquidity crisis has made the stock market increasingly attractive compared to ever more expensive bank loan capital.

“This is an absolutely new situation, which shows that companies are starting to consider the stock market as an alternative source of raising capital. We are getting close to a situation where stock capital will equal bank loans as a source of corporate funding,” Milovidov added.

“I don’t want to speculate excessively, but this year we may see the amount of capital raised through the stock exchange reaching 40 to 45% of new capital,” he continued.