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Following a disastrous year for the capital markets, only eight of 92 companies from Russia and the rest of the CIS finished 2008 with a higher market capitalization than at their time of listing, according to an annual report by financial communications consultancy The PBN Company.

"Not only did 2008 fall well short of expectations in terms of CIS IPO activity, it also saw most of the value created over the past 12 years disappear," says Peter Necarsulmer, CEO of The PBN Company. "Unfortunately, given current market conditions, we are unlikely to see this value begin to regenerate before 2010."

Russian mobile operator VimpelCom, the first-ever IPO from the region, has created and retained the most value since its NYSE listing in 1996 - up 1,066%. The other seven companies with an increase in market capitalization were: Open Investments at 456%, Mobile TeleSystems at 407%, Lebedyansky at 93%, Wimm-Bill-Dann at 40%, Pyaterochka (X5 Retail) at 17%, Novorossiysk Commercial Sea Port at 14%, and Novatek at 6%.

Deals hit record lows in 2008 - only seven companies from the CIS conducted IPOs in 2008, raising only $1.7bn, compared with 33 IPOs raising $34.3bn in 2007. Some 37 postponed and 11 cancelled flotations, meaning a total of 48 companies withdrew their projected IPO plans due to the terrible market conditions. "With the lowest level of IPO activity since 2004, 2008 certainly stands in stark contrast to 2007, which saw four different companies - PIK Group, ENRC, VTB and Sberbank - each raise more capital individually than 2008's combined total," says Necarsulmer.

Looking at individual sectors, consumer industries managed to sustain their performance during the year - the combined market capitalization of consumer companies actually increased by 0.6% from listing to the end of 2008, compared with decreases of 53% for energy companies, 58% for mining and heavy industry, 74% for agriculture, 78% for banking & finance, and 91% for real estate.

Kazakh floatations proved to be the most resilient in relative terms - since listing, the combined market capitalization of Kazakh companies fell by 50%, compared with 60% for Russian companies and 70% for Ukrainian companies.

"When the equity markets eventually open back up, investors will be much more fastidious and demanding in their assessment of Russian and CIS companies," Necarsulmer says. "Companies will need to use this time to put their houses in good order, so they are able to present a compelling, competitive investment case to win over increasingly wary investors."

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