MOSCOW. October 5 (RIA Novosti economic commentator Nina Kulikova) - Russia's stock market has been recently growing at a very fast rate. Since the beginning of the year the RTS (Russian Trading System) index has gone up by 60%, with about half of this growth occurring during the summer and in September.
The Bloomberg Agency reported that in the third quarter the RTS index has increased by 40%, registering a record growth among the 79 major world indices it monitors. Also recently, it climbed over 1,000 points for the first time. Vice Premier Alexander Zhukov said that capitalization of Russia's all industrial enterprises had reached 410 billion dollars.
Experts attribute this unprecedented growth to high prices on oil and oil products that are closely correlated with the Russian stock market. Foreign investors continue displaying a lot of interest in the Russian oil industry and Gazprom's forthcoming liberalization. Indeed, the oil and gas sector has been invariably at the top on the stock market.
Two other factors are also at work: macroeconomic stability in the domestic arena, and the fact that Russia has paid part of its debt to the Paris Club ahead of schedule. As a result, forecasts and investment ratings are steadily improving both as regards to the economy in general and individual companies. Meanwhile, Russian companies are making their first successful promotions of stock in Western markets.
Apparently, investors have perceived a reduction in the political risks within the country - the apprehensions caused by the "Yukos case" are gradually receding. Some experts talk about a delayed demand for Russian shares. If it were not for the "Yukos case", the RTS index might have reached 1,000 points earlier.
The fact that the RTS index has soared over 1,000 points is a positive event for the Russian market because it reflects the growing interest of both domestic and foreign investors in Russian companies. RTS President Oleg Safonov said that the growing RTS index shows that investors are eager to buy Russian assets, and, hence they have confidence in the prospects of the Russian economy as a whole.
Some experts believe that the long growth of the RTS index may be followed by its adjustment. "The Russian stock market has good prospects," said Olga Belenkaya. "But in recent time the growth of the RTS index has sped up - it has increased by 60% since the start of the year. Therefore, it may be subject to technical adjustment." However, Sergey Suverov from Gazprombank said that the Russian stock market has not been over-priced, and that "we are trading cheaper than other developing markets. Reaching 1,000 points is a major event for the Russian stock market, but not the limit."
The problem is that the successes of the Russian stock market are of little concern for ordinary people. Whereas in the West a considerable part of the population invest in securities, in Russia people keep their savings either on bank deposits or under the bed. Experts attribute this to lack of knowledge about the stock market. People at large are virtually ignorant about stock market instruments. For this reason Russia has few publicly owned corporations that primarily aim at increasing their value. Although analysts qualify the RTS growth as a highly positive fact, it has no influence on the incomes of the majority. Meanwhile, according to the Bank of Russia, the population keeps at home no less than 27 billion dollars. Putting this investment potential to use is a formidable task.
