Stock exchanges and brokers
In the 1990-ies in Russia there were hundreds of exchanges. For example, in 1995 the stock exchanges was 60 pieces. However, the boom in this market quickly disappeared with the departure or re-profiling of market participants, tightening of legislation, the introduction of licensing, etc. To the present time in the Russian market there are only six licensed exchanges. Two major players — the Moscow exchange (in the financial market) and SPIMEX (trademark). The other exchanges are operating in those market segments that have not yet captured the big players. A little away is the St. Petersburg currency exchange, which can become a stock exchange with a special status, it is planned to conduct placement and trading in securities of the companies targeted by the sanctions (see “Kommersant” on August 9).
The last two years of the exchange record growth in customer activity. In particular, the financial market, especially the stock segment, actively moving individuals. On the Moscow stock exchange the number of individuals from the beginning of 2019 increased by 77% to 3.5 million people, and the number of active clients by 69%, to 322 thousand people. At the St. Petersburg stock exchange active since the beginning of the year, customers has doubled and in November exceeded 72 thousand. The daily turnover of this exchange already reach $150 million, narrowing the gap with its main competitor.
These exchanges, which operate essentially on disjoint markets, strive to expand opportunities for customers. So, Moscow exchange is discussing an increase in trading time. In particular, it is planned to extend the trading session for the shares to 21:00 (now it goes from 10:00 to 18:45). Subsequently, do not exclude the extension and until 23:45. Before midnight, currently held futures instruments and currency. Therefore, for these assets considers the introduction of the morning session from 03:00 until 10:00. Saint Petersburg stock exchange, where currently, securities are traded by over 1 thousand foreign issuers, primarily in the U.S. and Europe, plans to expand their offer at the expense of other regions, in particular Hong Kong. In addition, these exchanges plan to develop a derivatives market, but again in different directions. So, the Moscow exchange is going to launch the deliverable futures contract on grain. Saint Petersburg stock exchange plans to launch futures contracts on securities of foreign issuers.
At the same time competition in the financial market is exacerbated not so much between marketplaces, but between exchanges and brokers. According to the Central Bank for the first nine months of 2019, the share of stock transactions of professional participants in the stock market compared to the same period last year has decreased from 79% to 77%, in the repo market — from 86% to 83%, in the currency market — from 64% to 53%. In the document, the Central Bank noted that the decline in the share of exchange transactions may indicate the internalization of transactions within the major players. On the one hand, this allows you to avoid exchange commissions, on the other — does not guarantee execution of the transaction on the best (market) conditions.
Partly this situation stems from the fact that the Moscow stock exchange began a policy of connecting users directly to trading, without intermediaries. Thus, the exchange builds up a direct chain with the end users. This opportunity is already used by 120 companies in the money market and the 37 companies on the exchange. Internalization enables banks and brokers with a large flow of clients to reduce their positions inside, bringing to the exchange, only part of client transactions. To date internalization is prevalent among banks in the foreign exchange market (Sberbank, VTB, Alfa-Bank, Bank "FC Opening"). The interest in this mechanism in the stock market showed almost all major Russian brokers (see “Kommersant” on 29 October).
Variety of commodities
The least developed and the most promising in terms of stock trading is commodity market of Russia. It exceeds several times the stock market, but has a number of difficulties because historically the trade of goods was determined by direct agreements. This market is also dominated by one exchange SPIMEX, which mainly conducts trading of petroleum and natural gas. "Every fifth ton of domestically produced petroleum products, as gasoline, this indicator is even higher — one in four tonne, traded on our exchange,"— said SPIMEX President Alexey Rybnikov.
Implemented five-year development strategy until 2023, according to which we seek new industry. "I recently started trading with mineral fertilizers actively developing trades in wood and timber. In mid-December, will run carbon trading", says Mr Rybnikov, noting that the government puts before the exchange task in 2020 to start trading scrap ferrous and nonferrous metals. In parallel, the exchange is working on the development of the product line on each of the existing markets. For example, in the oil market in addition to trading spot launched deliverable futures on oil products and liquefied hydrocarbon gases in the gas market are also preparing to launch a derivatives product. While the market is not focused on retail investors, but if the financial brokers will come to the market, the situation may change.
Develops commodity market and stock exchange "Saint Petersburg", but it is difficult to call a competitor SPIMEX. However, this exchange is also found in the segments attractive for the customers. According to the CEO of the exchange "Saint-Petersburg" Andrey Belinsky, today the main volume of trading is the market of oil products, the planned turnover by the end of this year — 12 billion rubles. However, the platform is implemented and the amber trade. The exchange is a partner of the Kaliningrad amber factory, production of which is about 90% of the world, and all that amber is being implemented through the stock exchange. In the current year the turnover of this raw material will amount to 3-4 billion rubles. Another promising direction of the exchange are trading products from aquatic biological resources. In the first quarter of 2020 will be developed a new strategy of development of the stock exchange "Saint-Petersburg". According to Mr. Belinsky, the emphasis in the development will be done on the commodity spot market and futures market. To start the exchange will be deliverable derivatives, including petroleum products and food products.
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