SPB Exchange had a slow October – Finance – Kommersant
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SPB Exchange reported a two-fold drop in the volume of trading in foreign securities in October. It amounted to only $2.47 billion, having returned to the values of three years ago. The number of active bidders dropped just as much. Experts attribute the low results of the site to the restrictions imposed by the Central Bank on trading in foreign securities for unqualified investors and the absence of large brokers that fell under blocking sanctions.
By the end of October, the volume of trading in foreign securities for SPB Exchange decreased by 58% by September – from $5.85 billion to $2.47 billion, the trading platform announced. Thus, the volume of transactions returned to the values of three years ago: the trading volume in October 2019 amounted to $2.54 billion. a month earlier, up to 175 thousand. The most popular traditionally were the securities of Tesla, Alibaba and NVIDIA.
The drop in trading volumes began in March, it is associated with the disconnection from trading of the largest brokers that fell under sanctions, recalls Dmitry Alexandrov, managing director of Ivolga Capital.
According to the latest disclosed data exchanges, the ten largest most active brokers until January of this year included VTB, Alfa-Bank, Otkritie Broker, that is, professional participants in respect of which the most stringent sanctions were adopted.
However, in the following months, the volumes remained in the range of $6-11 billion, and the number of active accounts was 300-550 thousand.
Since the end of September, the pressure of risk factors associated with partial mobilization and an increase in the likelihood of non-conventional weapons being involved in the conflict in Ukraine has increased, says Anna Avakimyan, chief analyst at RegBlok. In addition, the statistics reflect the restriction of access to trading in foreign securities (which are currently held mainly on the St. Petersburg Exchange) for unqualified investors, said Viktor Tunev, chief analyst at Ingosstrakh Investments. Now they can “except perhaps reduce positions,” he points out.
Bank of Russia From October 1, it restricted the execution by brokers of orders from unqualified investors to purchase foreign securities of issuers from unfriendly countries, and from January 1, 2023, it will prohibit them from conducting such operations.
The volume of trading in securities of issuers from friendly countries on the SPB Exchange is still small. In October, the volume of transactions in shares of Chinese companies listed on the Hong Kong stock exchange amounted to only HK$ 0.59 billion (about $75 million). At the same time, depositary receipts of Chinese companies, which are popular with Russian investors (in particular, Alibaba, Li Auto), do not fall under the Bank of Russia exception, as they are traded on American exchanges.
In November, the dynamics of trading volume will be smoother, Ms. Avakimyan believes, the difference with October figures will be plus or minus 10%. In addition, the exchange announced unblocking part of the assets (to the amount of $300 million) hung in the National Settlement Depository, which should increase the number of securities in circulation and, as a result, liquidity, Mr. Alexandrov believes. However, Mr. Tunev does not rule out that in the absence of unqualified investors, trading volumes and the number of active participants will continue to decline.
The exchange does not publish financial statements after the start of a special military operation, so it is rather difficult to assess the impact of a decrease in turnover on the financial stability of the site, Mr. Alexandrov points out.
However, the group, he recalls, had time to conduct an IPO before the start of the special operation, “and at the expense of the funds raised, the own funds of the structures belonging to the holding were increased, so that the liquidity reserve for this difficult year should be sufficient.”
Long-term negative dynamics, according to Ms. Avakimyan, will require the exchange to reformat the trading regime and, possibly, the range of available financial instruments. In the current conditions, the St. Petersburg Exchange needs to look for access to the markets of friendly countries, but this path is not easy and long, Mr. Tunev believes. “It is necessary to interest not only friendly countries, but also the regulator, who is concerned about infrastructure risks, and Russian investors who need reliable tools for diversifying investments,” the expert concluded.
The SPB Exchange declined to comment.
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