On March 12, 2007 on Derivatives’ Division of RTS FORTS starts trading on futures contracts on RTS Sectoral Indices: “RTS Index – Oil & Gas (RTSog) and RTS Index – Consumer & Retail (RTScr).
This news was announced by the RTS First Vice-president Roman Goryunov at the conference “The use of RTS Sectoral Indices and derivatives in assets management and building of investment strategies”.
On February 21, 2007 the Federal Financial Markets Service (FFMS) registered specifications of futures contracts on Sectoral Indices. Effective December 18, 2006 ”Russian Trading System” Stock Exchange makes settlement for the following Sectoral Indices:
- RTS Index– Oil&Gas (RTSog)
- RTS Index– Telecom (RTStl)
- RTS Index –Metals & Mining (RTSmm)
- RTS Index – Industrial (RTSin)
- RTS Index - Consumer & Retail (RTScr)
“Creation of new RTS Indices and derivatives on these indices has reflected the growing demand of national and foreign investors for diversified indicators of the Russian market. The presence of such derivatives on Sectoral indices will allow the asset managers to insure risks of indices portfolio. FORTS participants, in their turn, with the introduction of futures on Sectoral indices will get unlimited opportunities for hedging operations and arbitrage against futures on the main RTS Index (RTSI) and futures on single stocks”, says RTS First Vice-president Roman Goryunov.
For first futures contracts on Sectoral indices as basic assets were chosen RTS Index– Oil&Gas (RTSog) and RTS Index – Consumer & Retail (RTScr).
The choice of RTS Index– Oil&Gas (RTSog) is caused by the fact that the shares of oil and gas industry take up a considerable part of RTS Index (RTSI), whose futures have been successfully traded on RTS since August 2005. Besides, oil and gas are the key industries of the Russian economics, and this fact will provide interest to this product, and, consequently, its success.
As for the choice of RTS Index – Consumer & Retail (RTScr), it can be explained by the fact that for the present moment this sector of economics is very attractive for investors. The growing volume of retail trading, entrance of the companies from the consumer’s sector to IPO and a number of other factors contribute to the growth of interest to this sector of economics. The share of companies of the consumer’s sector in this respect is not large. And RTS Index – Consumer & Retail (RTScr) can widen the opportunities for investing into the consumer’s sector of economics.
“In our opinion for the “pilot” project in Sectoral indices, there were chosen two most interesting and promising indicators. We will see, how active the new futures will be traded and after that we will take we will take a decision about widening the range of derivatives on indices”, says RTS First Vice-president Roman Goryunov.
Derivatives market of RTS – FORTS is a leading trading ground for futures and options in Russia. Trading on FORTS started in September 2001. At present FORTS has the widest in Russian range of instruments. These are 25 contracts (16 futures and 9 options) on shares of Russian companies, bonds, short interest rates, currency, RTS Index, oil, oil products and gold.
The trading volume on FORTS in 2006 exceeded 100 bln dollars. All in all there were made more than 5 mln trades with 89,6 mln contracts. Average daily open interest on standard contracts in 2006 grew 4 times and in December reached 5 bln dollars.
Since August 2005 in Derivatives market FORTS a contract on RTS Index (RTSI) has been traded. It is one of the most popular instruments on the Russian stock market. Joint trading volume in 2006 in futures and options on RTS Index made 31,5 bln dollars or 31% of FORTS market.
