Page 96 - RusRPTFeb21

the new administration will bring more fiscal stimulus to override the impact of the pandemic, while coronavirus vaccines could further facilitate reopening and recovery of the economies.
Moscow Exchange​ (MOEX) has posted a trading update for December and 2020. ​December rounded off what was a very strong year for trading volumes. Equities volumes were flattish m/m, while fixed income dropped 18% m/m, and money market and FX posted mid-teen gains. The numbers bode well for the 4Q20 IFRS results (due in March), with all segments up q/q, equities and fixed income strongly so (24% and 40%, respectively). Similarly, there were strong gains in client balances in the final quarter, a reflection of the higher trading volumes. As for 2020 as a whole, equities ended up 92%, fixed income was up 17%, derivatives 58% and money market 24%, with FX the only laggard, at 7% growth. Securities trading volumes were 6-7% ahead of our expectations, with other segments 1-4% higher. Average ruble client balances ended the year strongly, rising 18% m/m to R107bn (their highest level since April), while dollar and euro balances also posted strong gains, rising 30% and 18% in original-currency terms, respectively.
Moscow Exchange has published retail investor statistics for December.
Inflows into Russian stocks were tiny at just R0.5bn. This means that retail investors did not deploy cash received in November, when they sold R115bn ($1.5bn) worth of stocks to nonresidents. This should provide a good cushion for the market in the event of future setbacks, in our view.
Inflows into mutual funds accelerated to R40bn. Around three-quarters of the amount went into bond market funds, while the equity market received around R10bn via mutual funds.
Brokers continued to bring new clients to the market, opening 710k new accounts and bringing the total number to nearly 9mn. The number of active brokerage accounts (performing more than one trade a month) reached 1.44mn. These numbers suggest that the outflow in November and negligible flows in December merely represented a temporary pause, and that the trend of more retail investors coming to the market remains intact.
Portfolio composition data suggests that retail investors were selling Gazprom, Nornickel and Sber to nonresidents. Retail holdings in Mail.ru Group, Aeroflot and Surgutneftegaz prefs increased.
Russian citizens have invested about RUB600bn rubles ($8.1bn) in complex financial products with a non-transparent structure, ​First Deputy Chairman of the Bank of Russia Sergei Shvetsov told reporters.
The influx of almost 4mn new investors - individuals on the stock market in 2020 turned out to be somewhat unexpected for the regulator and was associated with the growth of substitutes for investment life insurance (ILI). The official stressed that even for people with special education it is difficult to determine the price and profitability of such products.
"These two trends - the emergence of a large number of individuals with absolutely no experience and knowledge, and the emergence of a wide range of products with a murky structure (we are now assessing a portfolio of such
96 ​RUSSIA Country Report​ February 2021 ​ ​www.intellinews.com