Tuesday, 5 August 2014

Trading rises in response to Russia tensions


Trading in Russian securities listed in Moscow and London – including shares in the country's biggest banks – rose strongly during July amid on-going tensions linked to the crisis in Ukraine.

The value of shares traded on The Moscow Exchange increased by 16% year-on-year to €16 billion during July, according to data from Thomson Reuters.

The London Stock Exchange saw a similar increase in trading on its international order book, which lists depository receipts from over 40 emerging markets, though activity is heavily concentrated on Russian names such as Gazprom, Sberbank, Lukoil and Rosneft.

Trading on the IOB increased by 8.3% year-on-year to $15.5 billion during July, according to LSE data.

The average daily value traded on the IOB during the month was $675 million, though on July 17 - the day Malaysia Airlines Flight 17 was shot down over Ukraine - trading spiked to $1.2 billion. For the remaining 10 trading days of July, the average daily value traded on the IOB was $760 billion.

Bats Chi-X Europe, a six-year-old rival stock exchange to the LSE, also saw an increase in activity. It offers trading in FTSE RIOB index shares, which include the 15 most-traded traded Russian names on the IOB. Trading in these names increased 10% to €48.3 million on Bats last month, according to its own data.

The exchange also last week temporarily suspended a smart order routing service it offers on behalf of clients in VTB and Sberbank depositary receipts, following the announcement of EU sanctions, according to a market notice.

Tim Bevan, a managing director for prime services sales at Russian broker BCS, said: “Volumes are definitely higher, there is increased activity. There hasn’t been a super dramatic sell out, however, and we aren’t back to the lows we saw when Russia when into Crimea."

Bevan added that activity was "largely being driven by the local market. International volumes seem to be a bit weaker, there are a lot of players sat on the side-lines".

Last week, the EU published tough sanctions targeting Russia’s energy, financial and defence sectors and restricted access to EU capital markets for Russian state-owned financial institutions. These were in addition to US sanctions introduced earlier this year on individuals and the companies they own.

The Moscow market has been jittery since the ousting of former Ukranian President Viktor Yanukovych. This morning, the Micex index, based on 50 stocks listed in Moscow, was 8.5% down on its level at the start of the year.

Reference: Tim Cave Financial Times

No comments:

Post a Comment