Nov 28
SPB Exchange hopes the partnership will add to its appeal to retail investors as it conducts its IPO.
Image: Gennady Grachev via Wikimedia Commons

The SPB Exchange, Russia’s leading trading platform for foreign stocks, has announced a partnership with market data company Refinitiv, bolstering services for retail investors.

As a result, Refinitiv will add securities traded on the St Petersburg-based exchange – including equities, depositary receipts and bond instruments – to its real-time data feed for investors.

The SPB Exchange has been at the epicentre of a retail investment boom in Russia, as followed by NEO. The bourse has differentiated itself from other Russian exchanges by focusing its efforts on retail investors, who now account for around 99% of the transactions on the Exchange.

Until last year, the SPB Exchange was the only Russian bourse allowing investors to trade international securities. Now, it continues to attract retail investors hoping to trade foreign stocks through a range of features. For example, it reduces the risk to which investors are exposed through foreign currency fluctuations by allowing foreign securities to be traded in exchange for dollars, rather than rubles. It is also open for trading for 19 hours per day, making it is as accessible for traders in the USA as it is across Russia’s expansive territory.

The Refinitiv partnership fits into this pattern of measures for enticing retail investors, helping those without access to pricey market tools to understand the performance of their stocks in real time. The Exchange’s new SPB 100 index was launched with much the same aim in mind – it is indexed against the average portfolio of the Russian retail investor, and updates every second, so helps those interested in understanding the market position to get an instant snapshot of retail investor behaviour.

“We are delighted with our strategic partnership with Refinitiv, which enables us to greatly expand access for international investors to SPB Exchange’s unique market data,” said Roman Goryunov, CEO of SPB Exchange, in an announcement on the Exchange’s website.

The agreement comes as SPB Exchange is conducting an Initial Public Offering (IPO), with the clearing centre and subsidiary SPB Bank set to receive considerable capital investments from the proceeds, which are expected to total around $150mn, according to RBC. Trading in the company’s shares with the ticker “SPBE” is expected to begin on the SPB Exchange’s own venue as soon as November 19.

The SPB Exchange’s clearing centre has received an A+ rating from the Analytical Credit Rating Agency (ACRA) an additional measure for the soon-to-be public company that will help the exchange to increase the capacity of transactions it can handle.

The Exchange’s clearing centre also received a ‘stable’ outlook from the rating agency, which implies that the rating will not change over the next 12-18 months.

The announcement on the bourse’s website stresses that the centre’s strong business profile and liquidity underpin this rating, which is the first that the centre has ever received.

“ACRA noted MFB Clearing Center’s extremely high capital adequacy ratio, which has been above 402% on average over the past 12 months—the lowest permissible level is 100%. This gives the Clearing Center plenty of room to cover risks associated with its operations as well as the risk of potential impairment of assets on its own balance sheet,” the announcement said.

The rating will help to make the trading on the Exchange a more seamless experience.

“Obtaining an ACRA rating is an important step in the implementation of our strategy to improve the reliability of our settlement and clearing infrastructure and to reduce the costs for market participants when working on SPB Exchange,” said Goryunov.

SPB Exchange is benefiting from a boom in retail investment in Russia, as a low base rate and taxes on bank deposits as well as a volatile rouble encourage Russians to put their savings in securities. Russia was in the top five countries by global investment app downloads at the beginning of this year.

As well as catering to retail investors, the exchange also specialises in foreign stocks, with over 1900 international securities available as of June 30 2021, compared to just 200 on the Moscow Exchange (MOEX). As a result, SPB Exchange has over 12 million registered client accounts and growing. In 1H2021, total trading volume on the bourse reached approximately $206 billion, representing an increase of 356% from approximately $45 billion in 1H2020. The Exchange is now planning to hold an IPO on its own Exchange, which will see up to 14.3 million shares issued with a price range of $10.5-11.5, bringing the Exchange’s value to $1.2-1.3 billion, according to bne IntelliNews.

By Theo Normanton

Theo Normanton is a blogger and freelance journalist covering tech and the circular economy.

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