Page 143 - IFR Opportunities in Russian capital markets

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ifrintelligence reports/Opportunities in: Russian Capital Markets
There are standardised futures and options available for regular trading and clearing on four main Russian blue chips – LUKOIL, Gazprom, Surgutneftegaz, and Norilsk Nickel – while tailor- made contracts are available on 10 major Russian London-listed names, as well as on the FTSE Russia IOB Index.
The introduction of transparent London-based trading in Russian equity derivatives, in addition to FORTS and OTC markets, should further increase the depth and liquidity of the derivatives market, say bankers.
Despite being launched just as Christmas was emptying trading floors, the new platform was generating 1,200 contracts a day, a volume that doubled in the first month of the new year. The total value traded in single Russian Depositary Receipts derivatives by the end of January 2007 was US$152.7m, with US$49.8m traded in index derivatives, on 28,670 contracts.
Although these figures are minute in comparison with other derivative exchanges (last year the Chicago Mercantile Exchange traded an average of 1.76m contracts a day), analysts say the growing number of Russian listings on the LSE is likely to significantly increase trading volumes.
Part of the rationale for the LSE to launch the product is that some of Russia's biggest companies are already listed on the LSE and a total of US$20bn worth of new issues is expected in 2007, half of which is expected to end up on the LSE.
In 2006, 10 Russian companies joined the ranks of Russian companies to list on the LSE, including oil company Rosneft and steel giants Severstal and TMK, bringing the total to 19 Russian companies listed in London.
The Russian service has already attracted some leading Russian banks to join the EDX in anticipa- tion of growing volumes. Commercial banks UralSib, Renaissance Capital and Troika Dialog had already signed up by January and 11 more Russian banks were in the membership process at the end of January.
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