Russians have opened more than 140,000 individual investment accounts (IIAs) since January 2015 after the government introduced tax incentives for individuals to invest in Russian bonds and equities. Each fully funded account is worth the equivalent of approximately USD 6,400 per year.
Via this type of account retail investors are expected to hold assets worth RUB 1 trillion (about USD 16 billion) by 2020, the equivalent of about 11% of the free float of the Russian equities market today. Yet there remains huge growth potential – just 0.7% of Russians have investment accounts, compared to 10.0% of South Koreans and 10.9% of Chinese.
As local liquidity increases, more international investors will switch to trading shares in Moscow rather than depositary receipts listed elsewhere. The retail segment may become a crucial source of long-term capital on the financial market, which will increase its depth and push up valuation multiples.
IAA Accounts Dynamics
Source: Moscow Exchange
About the Author:
Evgeny Fetisov was appointed Chief Financial Officer (CFO) and confirmed as a member of the Executive Board of Moscow Exchange in February 2013.
Evgeny Fetisov was born in 1975. He graduated from the Finance Academy under the Government of the Russian Federation with a specialty in World Economics. He also studied finance at Harvard Business School. Between 1994 and 2007, Evgeny worked for various banks and consulting firms including Сitibank and McKinsey & Company. In 2007 he was appointed Managing Director and Partner of Da Vinci Capital Management, being in charge of financial sector investment. In 2009, he became a member of the Board of Directors of RTS Stock Exchange. After the merger of two exchanges he was a member of the Corporate Governance Commission and Deputy Head of the Budget Commission of Moscow Exchange.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.