The MICEX Group, which integrates trading and settlement systems for Russia’s financial markets, announces today that during the first three months of 2008 the total volume of on-exchange trading on all its markets amounted to RUR 26.8 trillion (US$ 1.1 trillion), 60% more than in the first quarter of 2007.
The average daily volume of on-exchange trading in the MICEX Group’s markets reached RUR 470.8 billion (US$ 19.4 billion).
Despite the strong turbulence in global capital markets, the volume of trading in the Russian on-exchange market continues to show steady growth. The volume of primary corporate bond issuance on the MICEX Stock Exchange grew by 8.5%.
During Q1 the MICEX Stock Exchange launched exchange bonds, a new instrument in the Russian securities market.
In the first quarter of 2008, the liquidity of the on-exchange securities market of the MICEX Stock Exchange (MICEX SE) continued to grow. Its share of the total volume of on-exchange trading of the MICEX Group rose to 46.7% (Q1 2007: 40.7%). In January–March 2008 the total volume of transactions in non-government securities on the MICEX SE, including shares, bonds, shares of investment funds and repos, reached RUR 12.5 trillion (US$ 516.2 billion), 60% more than in the same period in 2007.
Currently, the MICEX SE hosts trading in 1,297 securities from 759 issuers. Of these, 412 securities from 260 issuers are listed. Since the beginning of 2008, the number of securities traded on the MICEX SE has increased by 5.5%, while the number of issuers whose securities are admitted to on-exchange trading has grown by 4.0%.
There are now 644 organizations permitted to trade on the MICEX SE. Of these, 535 are admitted to trade, including 305 credit and 230 non-credit institutions. They serve 463,000 clients, including 443,500 individual investors (on 1.01.2008: 417,000).
In the first quarter of this year the volume of trades in shares on the MICEX Stock Exchange amounted to RUR 9.6 trillion (US$ 394.3 billion), 1.7 times more than in the first quarter of 2007. The most traded securities were shares in Gazprom (32.6% of the total volume), Norilsk Nickel (12.0%), RAO UES (11.4%), Sberbank (11.2%), LUKoil (8.1 %), Rostelecom (5.4%), Surgutneftegaz (4.4%), Rosneft (4.0%), VTB Bank (3.3%) and Tatneft (1.3%). The volume of equity repos increased three times over the same period in 2007 and amounted to RUR 5.6 trillion (US$ 229 billion). Today, 324 stocks from 205 issuers are traded on the MICEX SE. As of 31.03.2008, the market capitalization for the Exchange amounted to RUR 26 trillion rubles (US$ 1.1 trillion), up 10% on the same date in 2007.
The MICEX Index, comprising shares from 30 leading Russian issuers and representing the main sectors of Russia's economy, is now the leading indicator for the Russian stock market. Since the beginning of the year the MICEX Index has fallen by 13.8%, to 1,628.43, against a backdrop of the general decline in world stock markets. Today, the MICEX Index is used by management companies as the underlying assets for 36 Russian index funds, with a total asset value of more than RUR 5.8 billion.
The market for corporate and regional bonds on the MICEX SE continues to show steady growth. In the first three months of 2008 the total volume of transactions in all types of non-government bonds increased by 40% compared with the same period in 2007 and amounted to RUR 2.9 trillion (US$ 121.7 billion). Corporate bonds accounted for RUR 2.4 trillion (US$ 98.6 billion), regional bonds for RUR 543 billion (US$ 22.4 billion) and municipal bonds for RUR 16.3 billion (US$ 0.7 billion). In Q1 2008, 32 corporate bond issues were placed for an overall amount of RUR 119.2 billion, 8.5% more than in the same period during 2007.
In March this year, for the first time in Russia, exchange bonds were placed on the MICEX SE; the debut issues came from RBC Information Systems and AvtoVAZ. Exchange bonds are a new instrument for the Russian stock market that should be useful for managing liquidity, diversifying portfolios and covering cash shortfalls. Exchange bonds may replace or supplement issuance of bills of exchange. The market for exchange bonds has good prospects, with a potential volume comparable to that of the corporate bond market or the market for bills of exchange.
The volume of bond repos grew by 70%, to RUR 2.2 trillion (US$ 92.1 billion).
The MICEX SE hosts trading in 708 bonds from 508 issuers, including 592 corporate bonds (453 issuers), 88 regional bonds (35 issuers) and 28 municipal bonds (20 issuers).
Investors’ interest in shares of investment funds is growing. The volume of on-exchange trading in these instruments amounted to RUR 6 billion (US$ 248 million), 90% up on the first quarter of 2007. Currently, the MICEX SE hosts trading in 254 shares of investment funds managed by 95 management companies. The liquidity of on-exchange trading in shares of investment funds on the MICEX SE is supported by market makers and exchange specialists. Today, there are five participants in trading on the Exchange who have the status of specialists or market makers, and they make prices for 17 securities.
The liquidity of the currency market continues to grow. The share of this market in the overall volume of the on-exchange trading of the MICEX Group rose to 38.1% (in 2007: 35.5%). In the first quarter of 2008 the volume of on-exchange transactions in foreign currencies reached US$ 422.3 billion (RUR 10.2 trillion), 70% more than in Q1 2007. Spot transactions accounted for US$ 261 billion and swaps for US$ 161.3 billion, up 70% and 90%, respectively. The USD / RUB_UTS_TOM instrument accounted for the largest volume of transactions, at US$ 179.3 billion. This is 50% more than in 2007. Participants’ interest in the EUR/RUR segment of the market showed a significant increase. In the first quarter of 2008, the volume of transactions in the euro reached € 11 billion, 2.5 times more than in 2007. The National Clearing Center (NCC) provides clearing services on the on-exchange currency market. The NCC, part of the MICEX Group, is Russia first specialized clearing organization providing clearing in the organized capital markets as a central counterparty.
In the government securities market (GS) and the money market the total volume of transactions grew by 2.2 times in Q1 2008 and amounted to RUR 3.4 trillion (US$ 140.3 billion), including auctions and secondary trading in OFZs and OBRs, repos and deposit operations of the Bank of Russia. The share of this segment in the MICEX Group’s overall volume of on-exchange trading amounted to 12.6% (in 2007: 21.7%). The most impressive growth was shown by repos in the GS market, where the volume increased by 2.7 times against the same period in 2007 and amounted to RUR 2.5 trillion. In the first quarter of this year the Group continued to prepare the launch of repos involving a central counterparty, the functions of which will be performed by the NCC.
The steady increase of participants’ interest in the market for currency futures contributes to the increase of the volume of on-exchange transactions in currency derivatives. In the first quarter of 2008, in the MICEX Derivatives (Standard Contracts) Section, the total trading volume reached RUR 708.1 billion (US$ 29.2 billion), 90% more than in the same period in 2007. The share of this market in the overall volume of on-exchange trading at MICEX increased to 2.6% (in 2007: 2.1%). Open interest in RUR/USD contracts grew by 6.7% against the end of the previous year and reached US$ 5.2 billion (at the end of 2007: US$ 4.9 billion), which is another record figure for the MICEX Group.
Trading in interest-rate futures (futures on the MosIBOR and MosPrimeRate interest rates) and MICEX Index futures continues. The MICEX intends to launch new instruments: delivery futures on the medium- and long-term OFZ baskets and the futures contract on the accrued price of overnight swaps USD_TODTOM in the MICEX currency market.
On April 9, the National Mercantile Exchange (NAMEX), which is also a member of the MICEX Group, launched trading in delivery wheat futures in the Section of Standard Contracts for Cereals, Leguminous Plants and Industrial Crops.
An important area of the MICEX Group’s activities is the promotion of international cooperation with overseas exchange s and financial institutions. In the first quarter of 2008 the MICEX signed an agreement with the Vienna Stock Exchange (VSE) under which the MICEX will provide exchange information to the VSE. The VSE will use this information to calculate indices on the Russian stock market. In the first quarter of this year, the Association of National Numbering Agencies (ANNA) decided to confirm the authority of the National Depository Centre (NDC), which is again part of the MICEX Group, as a substitute numbering agency for the Republic of Uzbekistan.
