07 Nov 2008, Alastair Marsh, Risk magazine
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