RTS and MICEX indices: stock market pulse

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

The RTS and MICEX indices have become an integral part of the history of the Russian economy. They allow you to determine the mood prevailing in the stock market of the country. The values of these indicators, broadcast in real time by the Moscow Exchange, attract everyone's attention.

General concept of a stock index

Investors, financial analysts and portfolio managers need a simple and understandable indicator that assesses the current state of the stock market. Stock indices are used as such an indicator. They are calculated on the basis of quotes of a certain group of securities. Stock indices usually include the most liquid stocks listed on stock exchanges by large and influential companies. The values of these indicators give an idea of the general state of financial markets and national economies. The first ever stock index was developed in the US at the end of the 19th century. Its name is known even to people far from the economy. The famous Dow Jones index includes the shares of 30 largest American companies. Today, the S&P news agency continues to calculate and publish its value.

History of the Moscow Exchange

The first stock exchanges in Russia were created in the early 90s. The largest organizers of trading were two exchanges, known by the abbreviations MICEX and RTS. They developed in parallel. MICEX (Moscow Interbank Currency Exchange), in addition to the activities directly arising from its name, has become the largest stock market operator in the country. RTS (Russian Trading System) became the leader in terms of derivative financial instruments (futures and options contracts).

As a result of the merger that took place in 2011, the two largest exchanges formed a single holding called the Moscow Exchange. Stock indices RTS and MICEX serve as the main indicators of the domestic stock market. The Moscow Exchange organizes trading on the principle of automatic convergence of quotes without an artificially established difference between bid and offer prices.

Description

The RTS and MICEX indices reflect in general terms the capitalization of the Russian stock market. In other words, they give an idea of how much money investors are valuing publicly traded liquid shares. The RTS and MICEX indices have a number of differences. First, they are calculated in different currencies. The value of the RTS index is expressed in US dollars. One base point is equal to $2. The MICEX index is calculated in Russian currency. One base point is 100 rubles. The second difference is in the list of issuers (companies that have placed their securities on the stock exchange). RTSconsidered the so-called broad market index. This means that it includes the maximum number of issuers representing all sectors of the economy. Representativeness has its drawbacks: the list of the RTS index includes 50 stocks, about 50% of which are practically illiquid. The MICEX exchange chose the so-called blue chips (the largest, most reliable and stable companies). Its "basket" consists of 30 issuers. The dynamics of the MICEX index reflects the volatility of securities of leading companies in the energy and banking sectors. It is worth noting that no more than ten shares on the Russian market can be classified as highly liquid. The RTS and MICEX indices are calculated every second during the trading session. Issuer lists are reviewed every quarter.

Dynamics

The ups and downs of the Russian economy are reflected in the stock markets of RTS and MICEX. Indices and quotes reached their lowest levels during times of severe crises. Periods of economic growth led to bursts of optimism in the stock market and the establishment of new historical highs.