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In the first three months of 2007, the total volume of exchange-based trading in all of the MICEX Group’s market amounted to 16.45 trillion rubles (626.2 billion US dollars), 1.8 times more than in the first quarter of 2006. The exchange-based corporate securities market demonstrated the largest volume of trading and the highest rate of growth. Its share in the total exchange-based turnover of the MICEX Group grew to 47.5% over 33.6% in 2006.
In the first quarter of 2007, liquidity of the exchange-based corporate securities market on the MICEX Stock Exchange continued to grow. In January-March of 2007, the total volume of transactions in non-government securities, including stocks, bonds, shares of mutual funds and repos, on the MICEX SE reached 7.82 trillion rubles (297.4 billion dollars), 2.5 times more than in the same period of 2006. In the course of the trading session held on 28 February 2007, the daily volume of trading in securities reached a record 218.8 billion rubles (8.36 billion dollars). At present, the MICEX Stock Exchange organizes trading in 989 securities of 620 issuers. 237 securities of 144 issuers are listed. Since the beginning of 2007, the number of securities traded on the MICEX SE has grown by 2.3%, while the number of issuers whose securities are admitted to trading has grown by 5.6%. The Exchange has established the Sector for Innovation and Growth Companies (the IGC Sector). Its accredited listing agents help new issuers to enter the exchange-based market. Today, the number of organizations participating in trading on the MICEX Stock Exchange is 595. Of them, 484 are admitted to trading, including 284 credit and 198 non-credit organizations. They serve 315 thousand clients, including 280 thousand individual investors (on 1.01.2007 – 231 thousand) and 9 thousand institutional investors.
In the first quarter of 2007, the volume of trades in shares on the MICEX Stock Exchange amounted to 5.77 trillion rubles (219.3 billion dollars), 2.6 times more than in the 1st quarter of 2006. Most actively traded were shares in RAO UES (29.1%), Gazprom (24.7%), Sberbank (11.7%), LUKoil (9.6%), Norilsk Nickel (7.8%), Surgutneftegaz (5.1%), Rostelecom (4.4%), Rosneft (1.7%) and Uralsvyazinform (1.5%). The volume of equity repos grew 5.2 times over the 1st quarter of 2006 and amounted to 1.877 trillion rubles (71.4 billion dollars). 283 stocks of 186 issuers are traded on the MICEX SE. On 30.03.2007, the capitalization of the market for shares traded on the MICEX SE reached 23.63 trillion rubles (908.1 billion dollars), 1.6 times more than in 2006. This figure illustrates the overall growth of Russia’s stock market. The situation on the Russian stock market is reflected by the MICEX Index, which, in the 1st quarter of 2007, reached its historical maximum of 1754.75 points (at the close of trading on 26.02.2007). The new rules of calculation of the MICEX Index, developed with the participation of the Index Committee at the MICEX SE, provide for the increase of the index basket from 21 to 30 most liquid stocks, which represent the main segments of Russia’s economy. The developers of the rules of calculation of the MICEX Index took into account the Russian requirements established for indexes on which mutual funds can be based as well as demands of US regulators and the UCITS directives.
The market for corporate and regional bonds continues to grow rapidly. Its share in the total exchange-based turnover reached 12.5%. In the first three months of 2007, the total volume of transactions in all types of non-government bonds on the MICEX Stock Exchange grew 2.3 times over the same period in 2006 and amounted to 2.05 trillion rubles (78 billion dollars), including transactions in corporate bonds – 1.55 trillion rubles (58.9 billion dollars), regional bonds – 485 billion rubles (18.5 billion dollars) and municipal bonds – 16 billion rubles (0.6 billion dollars). Most actively traded are bonds of Russian Railways, Federal Network Company UES, Gazprom, LUKoil, AIZhK and other companies. In the first quarter of 2007, 44 issues of corporate bonds for the amount of 110 billion rubles were sold on the market for corporate and regional bonds. The volume of bond repos grew 4.1 times to 1.29 trillion rubles (49.1 billion dollars). The MICEX SE organizes trading in 564 bonds of 405 issuers, including 459 corporate bonds (349 issuers), 84 regional bonds (38 issuers) and 21 municipal bonds (18 issuers).
Investors’ interest in shares of mutual funds is growing steadily. The volume of exchange-based trading in these instruments grew 9.6 times over the 1st quarter of 2006 and amounted to 3.1 billion rubles (119 million dollars). Today, the MICEX SE organizes trading in 133 shares of 55 mutual funds. Most actively traded funds are AG Capital Intera, Yugra Real Estate (Region), Capital (Maxwell), Commercial Real Estate (Troika Dialog), Energia Capital (Interfin) and some others. Trading in shares of mutual funds intensified after the MICEX Stock Exchange introduced the institution of market makers and specialists. These are participants in trading supporting the buy and sell quotations of securities. At present, there are four traders who have been granted the status of specialist or market maker. They support quotations of ten securities.
Liquidity continues to grow on the foreign exchange market, the share of which in the total exchange-based turnover of the MICEX Group dropped to 40.7% (in 2006: 49.7%). In the first quarter of 2007 the volume of exchange-based transactions in foreign currencies reached 254.7 billion dollars (6.69 trillion rubles), 1.4 times more than in the same period of 2006. Spot transaction accounted for 170.3 billion dollars, while swaps accounted for 84.4 billion dollars. 116.3 billion dollars worth of transactions were effected in the USD/RUB_UTS_TOM instrument, which accounted for the largest volume of operations. In the first quarter of 2007, traders' interest in the euro/ruble segment grew considerably. The volume of transactions in the euro amounted to 4.4 billion euros, 2.6 times more than in the same period of 2006, while the volume of euro swaps grew to 1.6 billion euros, 3.2 times more than in 2006. To improve the system of risk management, the MICEX began to transfer clearing provided in the foreign exchange market to National Clearing Bank, which has already obtained the banking license from the Bank of Russia. National Clearing Bank is to become Russia’s first specialized clearing lending institution providing centralized clearing on the regulated capital market.
In the 1st quarter of 2007, the total volume of transactions in the government securities (GS) market and the money market grew 1.7 times and amounted to 1.58 trillion rubles (60 billion dollars), including auctions and secondary trading in GKO/OFZ, OBR, repos and deposit operations of the Bank of Russia. The share of this segment in the total exchange-based turnover of the MICEX Group amounted to 9.6%. The volume of inter-dealer repos in the GS market grew 3.7 times over the same period of 2006 and amounted to 614 billion rubles. In the first quarter of 2007, the MICEX completed the formation of the infrastructure which enables the Bank of Russia to provide collateral credits using the MICEX trading system and began to sign agreements with banks.
The stable growth of traders’ interest in the currency futures market helped to intensify trading in currency derivatives on the MICEX. In the 1st quarter of 2007, the volume of trading in the MICEX Derivatives (Standard Contracts) Market Section reached 14.0 billion dollars (369.1 billion rubles), 2.3 times more than in the same period of 2006. In February 2007, the volume of trading in US dollar futures reached a record-high monthly figure of 5.57 billion dollars (145.6 billion rubles) and the maximum daily figure of 910 million dollars (28.02.2007). The open interest in RUR/USD contract grew to a record 2.7 billion dollars (at the end of 2006: 1.4 billion dollars). Trading in the new instrument, interest rate futures (on MosIBOR and MosPrimeRate rates), continues. The MICEX is also preparing the launch of the MICEX Index futures.
One of the most important events in the 1st quarter of 2007 was the upgrading of the MICEX‘s status in the World Federation of Exchanges from correspondent member (since 2002) to affiliated member. The WFE, the global trade association for the exchange industry, includes over 100 exchanges from all regions of the world. The upgrading of the MICEX‘s status in the WFE is expected to attract more non-resident investors and widen the client base of the MICEX, as Western investors may increase their limits on national exchanges which are members of the WFE.
At present, by the total turnover of trading, the MICEX is the largest exchange in Russia, the CIS, Central and Eastern Europe. Besides, the MICEX Stock Exchange is among the top 20 stock exchanges by turnover in the share market.
