A currency section may appear on the St. Petersburg Currency Exchange

A currency section may appear on the St. Petersburg Currency Exchange (SPVB). According to experts, the project will cost the site hundreds of millions of rubles, and even in this case, it is unlikely to be able to compete with the Moscow Exchange. However, there are certain promising areas, analysts specify, for example, in the case of launching trading in exotic currencies.

SPCE posted an ad on HeadHunter looking for a head of the currency section. The candidate will have to launch and implement a project to create organized trading in currencies (TOD, TOM, SPOT, SWAP tools), as well as currency pairs, to attract participants, liquidity providers and market makers to organized trading. Mandatory experience on the Moscow Exchange and at least three years in the NCC.

The SPCE noted that the exchange’s strategy involves development as a universal organizer of trading: “Including the possibility of working on the foreign exchange market, which, under the current market conditions, is assessed as a promising direction. The decision to launch a currency section at SPCE will be considered after a detailed analysis.”

The main liquidity for currency transactions is concentrated on the Moscow Exchange, there are dozens of fairly large over-the-counter liquidity pools, so it will not be so easy for a new trading platform to find a place on the market, Vladislav Kochetkov, President of FG Finam, believes. The project, “obviously, is in its infancy,” added Viktor Shakhrin, general director of IVA Trust Management Company. Mr. Kochetkov notes that only investments in infrastructure will amount to hundreds of millions of rubles: “Plus personnel, marketing, market makers.”

Previously, SPCE had a foreign exchange section, but corporate clients switched to the Moscow site, says independent analyst Andrey Barkhota: “The difference in the size of the sites just affected.” But the expert believes that “SPVB has probably worked on the bugs and is ready to restart the project.”

Capital Lab partner Evgeny Shatov doubts that the attempt to compete with the Moscow Exchange will be successful – rather, SPCE will become a “reserve or alternative platform” in case “the threat of Western sanctions looms or infrastructure problems arise.” This role, the expert explains, will be helped by different places of storage (the depositary at SPCE is CJSC SPb RDC, the Moscow Exchange is served by NSD).

At the same time, trading in the currencies of exotic countries may become a popular trend, Mr. Shatov believes, especially given the policy of de-dollarization and the growing popularity of the currencies of friendly countries. First of all, these can be the currencies of the countries that are trade partners of the Russian Federation: the Indian rupee, the Armenian dram, the Kazakh tenge, the Uzbek sum.

Thus, the expert emphasizes, one can note the high trade turnover between the Russian Federation and Kazakhstan (it increased by $2 billion in 2022 to a record $26 billion, according to the TPP of the Russian Federation), as well as the size of the Kazakh economy (the second among the CIS countries). The trade turnover between Russia and Armenia also reached a record $4.1 billion, which is associated both with Western sanctions and with the relocation of thousands of Russian citizens to the country, whose economy has grown by 12.6%.

Exotic currencies, Shatov adds, are usually “synonymous with developing or emerging markets and are often subject to partial or complete exchange rate controls, making them non-convertible.” As examples, he cites the Thai baht, the Uruguayan peso, the Iraqi dinar, etc. With regard to the prospects for trading on the SPCE, according to the expert, “interesting options are the Iranian real, the Chinese yuan, the Hong Kong dollar, the Indian rupee, the Turkish lira, the Uzbek sum , Armenian dram and other currencies of friendly countries”.

Ksenia Kulikova