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MOEX to allow investors trade in U.S. blue-chip stocks by the end of summer

posted onJune 17, 2020

The Moscow Exchange (MOEX), Russia's largest bourse, will launch trading in U.S. stocks in the S&P 500 index by the end of summer, local and international media reported.

MOEX -which had said in 2018 it would make such an offering but then put off the plan- will  offer up to 30 stocks by the end of August while their number will be increased to 50 stocks by the end of the year, Mr Boris Blokhin Head of Cash Equity Department at MOEX told a news conference. 

Mr Blokhin added that the stocks will be traded on the MOEX in Russian roubles, while dividends will be paid in U.S. dollars.

The Central Bank of Russia which has previously said investment in foreign stocks deprives the Russian economy of investment capital, supported the project this time, according to Mr Igor Marich, managing director of money and derivatives market at MOEX.

In December 2019, the bank agreed to introduce a financial market skills test for Russians interested in buying foreign stocks.

The bank had sought to limit access for non-professional investors, arguing that some lacked the knowledge and experience needed to carry on trading foreign stocks without undue risk. 

MOEX index 2020

(The MOEX Russia Index reached an all time high of 3226.89 in January of 2020)

Last month, the central bank also said it is preparing recommendations for stock exchanges and traders aimed at minimising future risks when trading derivatives. 

The Saint Petersburg Exchange admitted to trading 55 stocks from the S&P 500 Index in November 2014. The offering has helped  the oldest exchange in Russia increase the number of clients and trading volumes. According to the exchange’s data, this segment raised the number of client accounts to over 46,000 in late 2018.

The MOEX also said evening trading will start on June 22. At the first stage, 25 Russian stocks from the Moscow Exchange index will be admitted to trading. The possibility of admitting exchange-traded funds (ETFs) trading in the evening session is also being considered. Bidding will be held from 19:00 to 23:50 (Moscow time)

In May 2020, the average daily trading volume across MOEX's markets increased by 9.8% to RUB 3.2 trln compared to RUB 2.9 trln in May 2019. Total trading volumes stood at RUB 60.6 trln compared to RUB 61 trln in the corresponding period last year.Volumes grew across almost all markets, led by the Equity Market (+55.4%), spot FX Market (+20.8%), Derivatives Market (+16.3%), Standartised OTC Derivatives Market (+13.1%) and the Money Market (+8%).

MOEX's long-awaited project will see high demand from investors, experts say. The move is expected to be welcomed in these uncertain times for the international financial markets.