Russian stocks dragged down by plummeting oil price

Trading volumes on Russia’s two main stock exchanges, Russian Trading System (RTS) and the Moscow Interbank Currency Exchange (Micex), were significantly down in October, following plunging commodity prices and a worsened global financial outlook.

Rostron Parry, a London-based consultancy to derivatives exchanges, said RTS had suffered in October after falling “under pressure from bearish trends on international and commodity markets”.

In September, RTS’ exchange and over-the-counter (OTC) market activity totalled $31.4 billion, but levels in October fell 60.5% to $12.4 billion.

On Micex, Russia’s other main exchange, the total cost of trading was down 52.2% from 4.6 trillion RUB ($17 billion) in September to 2.2 trillion RUB in October. In the same period the number of executed transactions increased from 5,247,683 to 5,440,143.

In October, RTSI, the exchange's benchmark index, fell 35% throughout the month from 1189.06 on October 1 to 773.37 on October 31. Meanwhile the Micex Index fell from 1027.66 on September 30 to 731.96 on October 31, a 28.77% decline.

The declining price of oil has rocked the Russian financial sector this year, which is largely structured around the exploitation of Russia’s large natural reserves.

More than 50% of the RTSI total capitalisation is concentrated in the oil and gas sector, which was down in October by 224.6 points, or 32.15%. Micex O&G, the exchanges oil and gas index also suffered in October falling 24.29% from 1647.72 on October 1 to 1247.54 on October 31.

The value of crude oil, as measured by the NYMX WTI crude oil active month index, fell 30.75% in October from 97.92 on October 1 to 67.81 on October 31. The NYMX natural gas active month index also fell in October from 8.02 on October 1 to 6.78 on October 31, a 15.46% decline.

Declining share prices of energy giants Gazprom and Lukoil, which fell 78.81 points and 74.79 points respectively in October, also had a significant negative impact on the RTSI.

Activity on RTS’ derivatives exchange, Futures and Options on RTS (Forts), also decreased during October, with futures volumes down 55.9% to 379.8 billion RUB from 860.5 billion RUB in September.

Volumes on Micex’s derivatives market were down 14.9% from 467.7 billion RUB in September to 398.1 billion RUB in October

See also: Feeling the strain
Legal changes have borne fruit, says Russian exchange chief