After discussing the results of the financial and economic activity of the MICEX, shareholders approved the MICEX balance sheet, the statement of financial results and the profit and loss statement. The MICEX 2003 accounting records, prepared by Russian standards, show that in 2003 the MICEX assets grew by 25% to 6,326 bln rubles, while the net income amounted to 188.068 mln rubles (in 2002 – 281.185 mln rubles, including the net income from operations – 165.048 mln rubles).
In accordance with shareholders’ decision, part of the net income, amounting to 106.384 mln rubles, will be paid as dividends while the remaining part will go the Exchange Business Development Foundation. The shareholders’ meeting approved PricewaterhouseCoopers Audit as the auditor of the MICEX until the next annual meeting.
The meeting discussed the results of the MICEX performance in 2003. The meeting noted that positive trends in the Russian economy and the MICEX efforts to develop different sectors of the organized market had a positive effect on the Exchange’s performance. The reporting year was the period of record high turnovers in the MICEX markets. Compared with 2002, the volume of trading grew 2.4 times and reached 280.8 bln dollars, while the daily average volume of transactions amounted to over 1.1 bln dollars. By these measures the MICEX remained leader in Russia, the CIS and Eastern Europe.
| Daily average volume of transactions in the MICEX markets (mln dollars) | |||
| 2002 | 2003 | Change. times | |
| Currency market | 261.6 | 584.6 | 2.2 |
| GKO/OFZ market | 32.6 | 144.9 | 4.4 |
| Share market | 155.1 | 322.8 | 2.1 |
| Bonds market | 20.3 | 74.9 | 3.7 |
| TOTAL | 471.3 | 1127.6 | 2.4 |
The MICEX CEO Alexander Potemkin noted in his report that the structure of the MICEX exchange turnover had become more balanced. As a result of 2003, the currency market accounted for over a half of the total MICEX turnover, while the share of the securities sector in the structure of the MICEX turnover grew to 48%.
The MICEX plays a significant role in the national system of exchange trading, which unites eight main regional financial centers of Russia. In 2003, the MICEX implemented new technologies widening the range financial instruments, offered to market participants, and providing additional possibilities for the Bank of Russia to pursue its money and credit policy.
In 2003, the MICEX remained Russia’s main center of stock trading. The MICEX share in the total turnover of Russia’s leading exchange floors by dealing in stocks exceeded 80%. Shares of mutual funds began to circulate on the Exchange, which helps to develop the country’s system of collective investing. New listing rules were adopted in the MICEX stock market, which require issuers to observe the Code of Corporate Conduct.
In 2003, the volume of operations involving corporate and regional bonds was growing rapidly. The total turnover of trading in these securities grew 3.7 times. At the close of 2003, 212 bonds of 152 issuers were traded on the MICEX.
The year of 2003 was the year of the revival of the government securities market. Turnovers were boosted by the launch of the exchange modified REPO and REPO against the Bank of Russia (direct REPO), the organization of the inter-dealer REPO and the circulation of the RF eurobonds with settlements in rubles in the trading system of the GKO/OFZ market as well as the beginning of deposit auctions.
In 2003, the volume of operations in the MICEX currency market continued to grow. The average daily volume of trading reached about 600 mln dollars. Developing the system of currency trading, the MICEX introduced a new instrument – operations in the US dollar with tomorrow settlements – in the MICEX Unified Trading Session. In 2003, the Exchange took new steps to unify the UTS and the afternoon SELT sessions. This will help to create for market participants, as early as in June 2004, the most effective schemes of work in the exchange currency market by increasing the liquidity of traded instruments and combining the advantages of different systems of risk management, based on collective and individual responsibility.
The MICEX and regional currency and stock exchanges took an active part in preparing and conducting state commodity interventions in the grain market.
The development of the MICEX financial markets was accompanied by the improvement of its technological base. Today, the MICEX hard- and software complex processes over 120 thousand orders of participants and over 80 thousand of transactions are registered. The modernization of the MICEX hard- and software complex included the introduction of a new operating system and more advanced computing equipment. Special attention was paid to the implementation of the protected system of electronic document turnover. The MICEX Certificates Management Center provided the connection of over 560 participants of trading to the Electronic Document Turnover System. About 3.5 thousand certificates of cryptographic keys were issued.
«The overall tendency of the world financial infrastructure demonstrates the consolidation of services at all levels: exchange trading, depositary activities, settlement and clearing systems”, noted A.Potemkin. “Today, our task is to create, on the basis of the MICEX Group, a central infrastructure organization of the Russian financial market, which would provide participants a full range of trading, clearing, settlement and depositary services on the basis of a hard- and software platform of world level. We are certain that the MICEX, relying on the support of shareholders and market participants, will be able to implement its plans».
