Moscow Exchange - More Details on US Equities Plans
Moscow Exchange has released more details about its plans to start trading US equities. We think this latest step should add another leg to the increasing appetite for equities among Russian retail investors. Longer-term, we think that boosting the share of equities in revenues from the current modest levels (including 9%/14% of fee income in 2019/1Q20) could be a major positive driver for MOEX's investment case and valuation multiples. > First set of US stocks to be traded in August. MOEX plans to start trading 20 US stocks on August 17, with a further 30 names to follow in November, and potentially a further 70 stocks added per quarter in the future. Among the stocks scheduled for August trading are all the major US tech companies, including Apple, Amazon, Alphabet, Facebook, Microsoft and Netflix. More retail/consumer focused stocks such as Starbucks, Coca-Cola and Walmart are set to follow in November. We note that there are no US banks on the list.> MOEX well-placed to take on St Petersburg in US equities. St Petersburg Exchange predominantly trades US equities, and has seen rapidly rising trading volumes in recent months, with international equities volumes tripling over the past three months from around $6 bln to $18 bln in June. However, as the preeminent platform for retail trading of Russian equities and home to the National Clearing Center (NCC) and National Settlement Depository (NSD), we think MOEX is well-placed to make quick headway in this segment.> Implications for Russian equities. Currently, foreign stocks make up a small share of Russian retail investors' equities portfolios, and retail investors' diversifying their portfolios may have some negative implications for Russian stocks. On the flip side, this step could well attract entirely new clients to MOEX, who would probably also buy local stocks. Retail investor participation in the local equities market continues to rise, with a record inflow of almost $1 bln in June.Moskovskaya Birzha MMVB-RTS PAO. Moskovskaya Birzha MMVB-RTS PAO (MMVB-RTS OAO) is a Russia-based integrated stock exchange that provides electronic trade organization, clearing and settlements on trades, depository and information services. The Company provides trading and settlement services in such segments of the financial market as foreign exchange (FX) market, federal bonds market, market of derivative financial instruments, cash equities market, corporate and regional fixed income market, commodities market, as well as market for state and municipal orders. The Company was established as a result of the merger between MMVB ZAO and RTS OAO. It operates through six branches and three representative offices. As of February 27, 2013, the Company's major shareholder was the Central bank of the Russian Federation with a stake of 22.47%. In January 24, 2014, the Company sold its whole stake in MMVB-IT ZAO.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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