Alexander Afanasyev, Chairman of the Management Board of Moscow Exchange, said that foreign investors are not leaving the Russian market; on the contrary, their share in the first quarter was 50%, and 48% in the derivatives market. And more than 300 thousand new investors - natural persons came to the exchange.
According to the Moscow Exchange, in the first quarter of 2019, foreign funds invested $ 75.4 billion in Russian stocks. “There is an idea that there is an outcome from Russia for foreign investors. This is not so, because on the stock market almost half of the turnover comes from foreign accounts, on the derivatives market, about the same way”, said Mr Afanasyev at a conference of the Moscow Exchange on Wednesday.
“The only region that has significantly increased the share of ownership of Russian free float from foreigners is predictable by the United States. They are increasing their share: before the imposition of sanctions, it was about 40%, now it is 54–55%”, he noted.
According to Mr Afanasyev, the share of investments in the shares of Russian companies is dominated by American and Canadian funds (54%), funds from continental Europe occupy 23%, from the UK - 21% of the market.
In addition, the first deputy chairman of the Bank of Russia Ksenia Yudaeva at the International Banking Forum “Treasury-2019” reported that the share of non-residents in federal loan bonds (OFZ) has now reached 26.3%. “Currently, the share of investments in OFZ non-residents on the accounts of foreign depositories of the National Settlement Depository [National Settlement Depository] in the total volume of the OFZ market is 26.3%, which corresponds to a total actual share of non-residents about 27%”, she said.
At the same time, Mrs Yudaeva added that foreigners returned more than half of the funds that they had withdrawn from April 2018 to the Russian government bonds.
Non-residents in March bought OFZs for 120.4 billion rubles, bringing their total volume to 2 trillion rubles, according to the Bank of Russia monthly review of the risks of financial markets. Growth in non-resident investments in Russian government securities in March was the highest in the last 18 months, and growth in investments in the first quarter of this year exceeded the outflow of non-residents' funds from the OFZ market from August to December 2018. This suggests that investors have fled from Russia in August due to fears of new Western sanctions. The OFZ market won back these losses.
In addition, Mr Afanasyev said that since the beginning of the year more than 300 thousand new investors - individuals have entered the Russian stock market. According to him, last year the number of citizens and their accounts opened with brokers increased by 50% or 700 thousand new Russian investors.
“This year at the end of March - 281 thousand, now for 300 thousand newcomers. 70% of them come through digital ways”, said Mr Afanasyev during the presentation of the program “Bonds for SMEs: New Opportunities” at the Moscow Exchange.
At the same time, Mr Afanasyev noted that most investors choose OFZs as the most protected product in terms of credit and market risk.
According to the exchange, the number of individual accounts in the first quarter of this year increased by 400 thousand and amounted to 3.4 million, while in the first quarter of 2018 the number of accounts increased by only 140 thousand.