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Moscow Exchange Reported a Record Influx of New Investors
January 16, 2020 17:19

The number of private investors on the Moscow Exchange doubled amid falling bank rates and the development of brokerage applications. This is a record inflow, although Russia is still far behind foreign countries.

The number of private investors on the Moscow Exchange doubled in a year and amounted to 3.86 million people. In 2019, 1.9 million people started trading on the site, and the inflow is becoming faster year after year - in 2018, 645,000 investors opened accounts, and in 2017 - about 207,000 customers.

In turn, the St. Petersburg Exchange, where  one can trade shares of foreign companies, recorded a three-fold increase in investors last year - from 910,000 to 3.06 million accounts.

The Central Bank attributed the influx of investors to lower rates on bank deposits, the rapid growth of the stock and bond market, as well as the abolition of depositary commissions by some brokers. The brokers   agree that investors are looking for an alternative to deposits. After five reductions in the key interest rate of the Central Bank last year, the average maximum rate of ruble deposits in the top 10 banks reached a historic low of 6.011% per annum. 

Stock markets, in turn, are breaking records. Last month, the Moscow Stock Exchange Index grew by 28.5%, while the index of the largest US companies S&P 500 added 29%. Information about the record growth in the stock market attracted the attention of private investors. 

When deposit rates started to decline steadily, citizens began to look for alternatives for higher returns. Broker mobile applications and the possibility of remote identification helped the process. Advertising campaigns and financial literacy projects carried out by large brokers also led to increased interest.

Despite the rapid growth in the number of brokerage accounts, the share of investments in securities in the structure of financial assets of Russians is still significantly lower than in foreign countries. It is only 13%, while in Eastern Europe it is about 50%, and in the USA - more than 80%.

Author: Anna Dorozhkina

Tags: Russian economy Moscow St. Petersburg   

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