Page 17 - RusRPTMar21

Just last week, one of Russia’s largest companies, Norilsk Nickel, was in the firing line after a mineral processing plant in the Arctic Circle collapsed, killing three people. The firm’s billionaire president, Vladimir Potanin, Russia’s richest man, admitted to journalists that “this accident was presumably due to a gross violation of safety and industrial safety standards by the heads of the enterprise.” The scandal-hit mining giant was fined a colossal $2 billion earlier this month after more than 20,000 tons of diesel fuel leaked from a storage tank into rivers and soil near the city of Norilsk, from which the firm draws its name. At the end of last year, Russian official Alexander Chupriyan called the disaster the worst “in the history of mankind.” Despite legal action from prosecutors, the company’s share price has continued to rise, jumping around 60 percent since March last year. In 2021 alone, the value of the company has risen by close to seven percent.
2.5 Number of new retail equity trading accounts opened accelerates, tops 10mn for the first time
The tsunami of Russian retail investors opening brokerage accounts with the Moscow Exchange (MOEX) topped 10mn accounts for the first time ever as regular Russians continue to cast about for new ways to invest their savings.
Following a series of deep rate cuts by the Central Bank of Russia (CBR) as inflation fell to post-Soviet record lows millions of Russians has been with drawing their savings from their traditional favourite store of wealth, high yielding bank deposit accounts, and looking for an investment with a better return.
For most Russians the main priority of the last three decades was how to protect the value of their savings in the face of double digit inflation. Banks, desperate to raise capital, have always offered high returns on deposits and few Russians did more than put their cash on deposit, shopping around for the banks that offered the highest yields.
But with the CBR’s overnight rate currently at 4.25%, down from 17% in 2014, and inflation running at just over 5%, the commercial bank rates on deposits have fallen to around 6% offering a very meagre return on investment.
Russian stocks are proving to be an increasingly popular alternative with private investors now accounting for 42% of al equity trading, 10.5% of bonds, 42% of derivatives and 14% of currency trading, according to MOEX
In just the last year more than 5mn new brokerage accounts have been opened by individuals, according to MOEX. As bne IntelliNews reported retail investors bought RUB28.5bn ($380mn) worth of Russian stocks in January 2021. And last year retail investors poured $8.6bn into foreign stocks, which they can now buy via MOEX thanks to the tie up between the Russian exchange and international settlements and payment system Clearstream in 2012. However, 85% of all Russian investments into equities are into domestic
17 RUSSIA Country Report March 2021 www.intellinews.com