Trading volume dynamics,
- MOEX remained the main platform for Russian issuers to raise capital, with six equity placements (including four IPOs), 10 government bond issues and 312 corporate bond issues;
- The product offering was substantially expanded with the launch of on-exchange grain trading;
- MOEX further diversified its product line with the launch of new FX and index futures, as well as structured bonds;
- MOEX delivered on its strategy to attract domestic retail investors, with 88,000 individual investment accounts opened during 2015 (total 103,262 as of 1 March 2016) and significant growth in the number of individual traders on the FX Market (up 89% YoY) and Derivatives Market (up 31% YoY).
- Trading volumes on the FX Market totalled RUB 310.8 trln, up 36.0% year-on-year. Due to elevated FX rate volatility, spot trading volumes rose 32.8% year-on-year, while swap trading volumes increased 37.6% year-on-year on the back of continued demand for liquidity-management products.
- In 2015 Moscow Exchange grew its share of the total FX market. The Exchange’s share of the domestic interbank market rose from 42% to 49%, while its share of USD/RUB trading increased from 50% to 58%, and of EUR/RUB trading from 64% to 68%.
- The CNY/RUB currency pair continued to grow rapidly, with trading volumes tripling in monetary terms to RUB 858 bln in 2015.
- At the end of 2015 there were 511 trading members of Moscow Exchange’s FX Market: 459 banks and 52 non-credit institutions holding professional securities market participant licences.
- In 2016, the FX Market will continue developing tools and client services. Plans include the launch of trading in deliverable futures of three FX pairs — USD/RUB, EUR/RUB and CNY/RUB, as well as to introduce of new currency pairs.
- Two new instruments, USDRUB_FIX and EURRUB_ FIX, are expected to be launched in MOEX’s fixings. Participants will indicate the price of transactions using these instruments as the difference between MOEX’s FX fixing and the final exchange rate of the closed trade.
- The Exchange’s FX fixing has been recognised compliant with the IOSCO principles. This will help promote it among international investors and participants of the global financial market as well as create a new internationally recognised fixing for the USB/RUB rate to be used in exchange-traded and OTC derivatives.
- Client access will continue developing and the client base will further expand as more Russian legal entities and individuals enter the market and owing to improved technologies and services when servicing clients on the FX Market. A project will be realised to treat separately positions of third-level clients serviced by different trading and clearing firms.
- Moscow Exchange is planning to grow the number of non-residents who hold general clearing member status, as well as the number of clients using SMA to access the Exchange. These efforts should help to attract more international clients to the FX Market.
- As part of the development of clearing services aimed at reducing members’ costs of trading the market, MOEX plans to introduce inter-product spreads, netting-off of risks of members’ positions across markets, integration of collateral, and unification of clearing procedures and the list of assets accepted as collateral.
- In 2015, the trading volume of the Money Market exceeded RUB 213.8 trln. In December, the average daily trading volume reached RUB 1,255.2 bln. The share of repo transactions in Money Market trading volumes exceeded 85%. In 2015 the volume of depository and credit transactions was RUB 32.8 trln, which is 55% higher than in 2014.
- Volumes of repo transactions with Eurobonds are growing rapidly: repo with the Central Counterparty (CCP) and interdealer repos in Eurobonds reached RUB 28.3 trln, seven times higher than in 2014.
- In 2016, the main project of the Money Market will be repo using general collateral certificates (GCC), which will help to boost transaction volumes on the Equity & Bond and Money Markets. This new instrument, announced on 29 February 2016, combines the advantages of the two most marketable products of the Russian money market: repo with the CCP and repo with a securities basket and collateral management. A GCC is a non-issue grade security with mandatory centralised depositing. It is issued by NCC Clearing Bank in exchange for assets held in the property pool. The project brings together various collaterals into a universal liquidity management instrument, and helps ensure maximum use of the mechanism for asset replacement in closed trades. During the first stage, participants may contribute to the pool cash (EUR, USD, RUB) and all bonds accepted by NCC Clearing Bank as collateral (OFZs, corporate bonds, Eurobonds). Later the list of assets accepted to the property pool will be expanded by stocks.
- The year 2016 will see further improvement of the key instrument of the Moscow Exchange Money Market — repos with the CCP — as well as broadening of interdealer repo tools.
Moscow Exchange plans to continue the technological development of the
M-Depositssegment, as well as to attract new auction organisers to provide the option of depositing spare cash with the bank.
- In 2015, turnover on Moscow Exchange’s Derivatives Market increased 52.8% year-on-year to RUB 93.71 trillion. The largest gain in trading volumes was in the commodity and FX sections of the Derivatives Market. This thus changed the structure of volumes: the share of index and equity derivatives decreased, whereas the share of FX and commodity instruments increased.
- Strong trading volumes on the Derivatives Market, among other things, was due to successfully marketing program, which resulted both in significant growth in the number of new clients and in higher overall activity on the market.
- Average active monthly clients (active client accounts) increased by 25% in 2015 from 31,800 to 39,700. December 2015 saw 47,503 active clients, a record for the Derivatives Market.
In 2016, there are plans to launch and develop futures contracts on interest rates (Ruonia and MOEX-repo), as well as to extend an option chain for stock futures.
The main objectives in developing the infrastructure of the Derivatives Market include:
- To create a transparent market for structured products. The structured products market is closely linked to the Derivatives Market. The development of a legal and regulatory framework, standards and a technological basis will have a positive impact on volumes of Moscow Exchange’s Derivatives Market.
- To develop segregation and portability services for clients. Independent accounting and protection of funds held by clients of professional participants (brokers) will allow the market to attract major domestic and international institutional participants, and will also increase the confidence that retail investors have in the market.
Among key areas for the technological development of services in the derivatives market are:
- Margining by settlement codes. The initiative aims to ensure a unified system of clearing accounting among Moscow Exchange markets and compliance with international requirements for foreign CCPs (EMIR).
- Developing and introducing a new billing module to help ensure flexible development of various tariff plans and marketing programmes for developing new and existing products for the Derivatives Market.
- Total bond trading volumes in 2015 were RUB 11.2 trillion, up 5.2% year-on-year. Issuance of federal government bonds (OFZs) increased by 359.3% year-on-year, while placements of corporate bonds set a new record of RUB 2.0 trillion (up 5.2% year-on-year).
- Total equity trading volumes in 2015 were RUB 9.40 trillion, down 8.6% year-on-year. The Equity Market’s total capitalisation was RUB 28.8 trillion (USD 393.2 billion) as of year-end 2015.
- In 2016, the Exchange is planning to expand its bond product line to include structured bonds issued by banks and linked to various indicators; non-mortgage securitisation of loans, which is one of the techniques used to free up Russian banks’ capital; as well as interest rate linked products issued by corporates that are similar to OFZ-INs.
- In 2015, Moscow Exchange registered four issues of exchange-traded bonds denominated in CNY worth a total of CNY 2.85 billion and two issues of exchangetraded bonds denominated in CHF worth CHF 400 million. These registered bonds may be placed on the market in 2016.
- USD-denominated Eurobonds were transferred to the T+2 settlement cycle as of 25 January 2016. This move is aimed at reducing funding costs of participants and increasing trading volumes by removing the full collateral requirement.
- New exchange-traded funds (ETFs) are expected to be launched. By early 2016, there were 11 ETFs on Moscow Exchange with underlying assets of Eurobonds of Russian corporates, US Treasury bonds, shares of the MSCI index family and gold bullion. At the beginning of March 2016, the first ETF on the RTS Index was admitted to trading.
ON-EXCHANGE GRAIN TRADING
On 23 December 2015, the National Mercantile Exchange, which is part of Moscow Exchange Group, launched on-exchange trading in deliverable forward contracts with wheat as the underlying asset. Trading is carried out as a bilateral anonymous auction. The contract exercise period ranges from three days to six months. National Logistics Company organises transportation, alongside survey companies. The grain is stored in accredited grain elevators.
PRECIOUS METALS TRADING
The Precious Metals Market launched by Moscow Exchange late in 2013 increased strongly in 2015. Total trading volumes increased six times year-on-year to RUB 94.1 bln, with physical volumes equal to 41.9 tonnes of gold and 1.4 tonnes of silver. Some of these volumes were physically disposed by participants, involving the acceptance and transfer of bullions to the vault of NCC Clearing Bank. Gold and silver are traded on the FX Market platform using a unified system of margining and risk management. Trading collateral is accepted in RUB, USD, EUR and CNY, as well as precious metals.
ON-EXCHANGE GRAIN TRADING
In 2016, Moscow Exchange plans to continue expanding opportunities for participants of the Grain Market. To provide liquidity, the Exchange intends to be more active in attracting new participants, increase the number of commodity warehouses by accrediting elevators in various regions of Russia, and improve the inventory control system for commodities in accredited elevators.
PRECIOUS METALS TRADING
In 2016, Moscow Exchange plans to continue improving services and conditions for on-exchange trading of precious metals for all categories of participants. The Exchange is considering expanding its product range with platinum group metals if there is interest from commodities and financial market participants.