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According to the MICEX CEO Alexander Potemkin, the formation of new top management was especially important for the MICEX. The new management succeeded in solving a number of crucial tasks in the interests of the whole financial market. In particular, it has implemented the project to unite two trading session in the currency market, revived trading in standard contracts, established "The MICEX Stock Exchange", which is expected to become the basis for the organization of trading in the MICEX stock market, solved the most acute problems of information interaction between the MICEX and the distributors of its information and raised the transparency of the MICEX.
In 2003, the volume of trading in corporate and regional securities on the MICEX grew 2.2 times. The total volume of transactions in non-government securities, including operations in stocks, bonds and REPO operations, reached 99.1 billion dollars (in 2002 - 43.9 billion dollars). The volume of secondary trading in stocks increased 1.8 times to 70.2 billion dollars as compared with 39.6 billion dollars in 2002. As a result of 2003, the MICEX Index reached the record level of 514.71 points and showed 61.4% growth (as of 31 December 2002 - 318.91 points). In 2003, the volume of stock trading, accounted for by individual investors working through the Internet, continued to grow. Today, over 70% of all transactions are made on the MICEX through the Internet gateway. Considering the fact that the MICEX accounts for about 90% of the exchange turnover of securities, the important role of the Internet-based trading in the modern Russian stock market becomes obvious.
In 2003, the MICEX introduced new listing rules, which toughens requirements for issuers' transparency and require that issuers observe the code of corporate conduct. Nevertheless, the number of companies whose securities circulate on the MICEX increased. At present, in the MICEX Stock Market Section trades are held in 381 securities of 235 issuers. 146 securities of 92 issuers are on quotation lists of different levels. These figures demonstrate the growing role of the stock segment in the exchange activity. This was reflected in the organizational structure: in December 2003, the MICEX Stock Exchange was established within the MICEX group, which, after obtaining the stock exchange license from the RF Securities Commission, will organize trading in securities.
In 2003, the market of debt instruments - corporate and regional bonds - was developing rapidly. In 2003, the volume of new issues of these instruments on the MICEX reached 4 billion dollars, exceeding the same figure for the market of government securities. The market of corporate bonds was growing faster (3.2 times) than the stock market as a whole. The volume of transactions in corporate bonds reached 12.5 billion dollars (8.3 billion dollars - in secondary trading). The share of this instrument in the exchange turnover grew from 3.3 to 4.4%.
The growth of the turnover of subfederal (regional) and municipal bonds was especially impressive - 5.2 and 4.2 times correspondingly. The volume of exchange transactions in these securities reached 6.03 billion dollars and 0.14 billion dollars correspondingly.
Impressive growth of turnover (4.4 times) was reached in the market of government securities. The total volume of transactions in these instruments reached 35.9 billion dollars (in 2002 - 8.1 billion dollars). This was the result of developing REPO operations in government securities on the MICEX. The volume of modified REPO operations and direct REPO operations reached 23.7 billion dollars. The volume of primary placement of GKO/OFZ at auctions grew 1.6 times. As a result, the share of the government securities market in the total exchange turnover increased from 6.9 to 12.8%.
In 2003, the volume of exchange transactions in foreign currencies reached 145.6 billion dollars (2.2 times more than in 2002). The bulk of operations - 81.8 billion dollars - was accounted for by the afternoon session in the System of Electronic Lot Trading. The biggest number of operations was accounted for by currency pairs "dollars-ruble" (142.9 billion dollars) and "euro-ruble" (2.5 billion dollars). While developing the system of currency trading, the MICEX began to unite two trading sessions: the UTS and the afternoon SELT session. In 2004, this will secure for market participants better schemes of work in the exchange currency market by increasing the liquidity of certain instruments and decreasing operational costs.
One of the MICEX's practical steps was the revival of the market of currency futures. The increased volatility of the dollar has brought about the growth of turnovers in this segment: in the recent time, the daily turnover has grown from zero point to 100 million rubles. In 2003, the total turnover in the Derivatives Market Section reached 110 million dollars, while the volume of open positions reached 8.13 million dollars by the end of the year. Positive trends in this sector were noticed as early as in the beginning of 2004 when record turnover (5.5 million dollars - 8 January 2004) and record volume of open positions (23.36 million dollars - 13 January 2004) were reached. The currency segment of the MICEX derivatives market was revived thanks to the efforts of such commercial banks as Sberbank, MDM-Bank, Conversbank, Promstroibank SPB, Tsentrokredit bank and Matallinvestbank. This bank pool is being joined by other market participants.
One of the steps, that the new MICEX management took to increase the MICEX transparency, was the launch of a new information and analytical journal "Exchange Review". The MICEX Information and Analytical Service has begun to provide regular comments on different sectors of the exchange market. The MICEX web-site has been redesigned.
