Restrictions on trading are lifted – Kommersant FM
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The Moscow Exchange will hold discrete auctions more often, representatives of the trading platform announced this. It is also expected that these auctions will become more efficient. The changes are designed to reduce volatility in the Russian stock market. Lately, situations have often arisen when prices for securities that are far from the first echelon begin to rise sharply without obvious reasons.
From October 30, a number of restrictions on discrete auctions will be lifted. Details are in the Kommersant FM help.
A discrete auction is used when the market behaves abnormally and transactions take place at a clearly suboptimal price. This tool is introduced as an emergency measure if the index rises or falls by more than 15% relative to the values of the previous day, or if the price of individual securities changes by more than 20% for ten minutes in a row (from October 30 – within five minutes).
During discrete auctions, which are usually announced for half an hour, the participation of market orders, that is, at the current price, is prohibited from participating in the auction. Only limited bids are taken into account, which specifically indicate at what price the trading participant wants to purchase the “problem” security.
From October 30, the number of discrete auctions held for each share will have no restrictions. In addition, their opening hours will be extended, in particular to the evening trading session.
According to representatives of the Moscow Exchange, October at the site was quite calm. But August and September were “explosive” in this sense; dozens of discrete auctions were held at the end of summer and beginning of autumn.
If such procedures are launched more often, this will really reduce volatility and make the trading environment calmer, noted Dmitry Alexandrov, managing director of the investment company Ivolga Capital:
“A lot of the point of a discrete auction is that it gives the market time to cool. The problem with acceleration is that investors are afraid of not having time to buy an asset at a cheaper price, because it accelerates very sharply, this can be tens of percent, and this also encourages them to make a purchase as early as possible, without leaving time to think.
When a discrete auction takes place, all participants have the opportunity to study the situation, reporting, and again think carefully about whether it is necessary to participate in this paper.
In this sense, of course, pricing becomes significantly more fair. As for volatility, it will, of course, decrease, since it will remove this emotional component or at least make it smaller.
Nowadays, trading on the stock market is undoubtedly dominated by individuals, this is more than 80% of the turnover. And if we take the third tier of securities, then the activity of private investors there is even higher than in the market as a whole.
Of course, many players read Telegram channels and other sources, which can often provide information for selfish purposes in such a way as to influence pricing on the market. Sometimes this can be connected not only with manipulation factors, but also simply with certain emotional moments, inflating bubbles is trivial due to the fact that now there are not many assets in which investors can, in principle, invest.”
Some experts believe that the increase in the number of discrete auctions will become a demotivating factor for some investors taking part in the auctions. However, the director of the Moscow office of Tax Global Consulting, Eduard Savulyak, does not agree with this:
“Games of this kind are only possible on low-liquidity securities. That is, roughly speaking, where the trading volume is a million, such things can be done. Where the volume is tens or even more so hundreds of billions, it is difficult to try to disperse something, even if you have a wagonload of time.
At the same time, there will always be low-liquidity securities, and, naturally, they will continue to try to disperse these assets, because people who can invest, relatively speaking, 100 million rubles in this kind of adventure. and accelerate the asset by the required amount of interest, they will definitely be found.
So, apparently, such a measure can somehow influence the situation. However, for those adventurous investors who are afraid that suddenly there will no longer be such a holiday on their street, low-liquidity securities will always be at their service.”
According to the Moscow Exchange, this year, ups and downs in prices for securities of mid- and small-cap companies have become noticeably more frequent. Thus, in the third quarter, 63 cases of destabilization of stock quotes and depositary receipts were recorded on the site.
For example, in just one trading day on September 14, the exchange held more than 60 discrete auctions. However, in the entire 2022, only 13 such episodes occurred.
Everything is clear with us – Telegram channel “Kommersant FM”.
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