Chapter 15. Exchange indices of Russia

Russia also has its own indices. Here we will familiarize ourselves with the five most important ones. MICEX Index is an effective capitalization weighted market index of the most liquid shares of Russian companies traded on the Moscow Interbank Currency Exchange. MICEX began to be calculated on 22.09.1997, at that time it was called “MICEX Composite Stock Index”. Its current name has been used since 28.11.2002. The methodology used to calculate the MICEX Index is a modern index management system, on the basis of which a special Index Committee functions and which determines the principles of securities inclusion in the index listing based on expert evaluation.

The MICEX index is calculated in real time, with each transaction with shares of 30 companies included in the calculation base. Now the leading stocks that have the greatest influence on the MICEX index are shares of Gazprom, Sberbank of Russia, LUKOIL, MMC Norilsk Nickel and Rosneft.

The RTS index is next in value. For the base value of the index is taken the number 100, based on the basis of stock prices expressed in U.S. dollars. According to this methodology it has been calculated since the beginning of 1998, and the RTS index itself appeared on 01.091995. Due to its peg to the US dollar, the RTS index is affected by fluctuations of this currency, i.e., during the growth of the US dollar, the RTS falls by the same amount, which distorts the real dynamics of stock prices. At one time, in conditions of high inflation, the RTS index was convenient by linking the dynamics to a relatively stable U.S. dollar. At the moment, the most influential issuers are LUKOIL, Sberbank of Russia, Gazprom, Surgutneftegaz and Rosneft. In total, the RTS index is calculated on the shares of 50 companies.

RCBI – MICEX Russian Corporate Bond Index (Russian Corporate Bond Index) is a weighted (by market capitalization) index of bonds traded in the futures section of the MICEX stock market. The basis for calculation of RCBI is the prices of deals made in the main trading mode on non-addressed deals.

There is also the RTS-2 index, reflecting the dynamics of “second echelon” shares, as well as seven industry indices calculated on securities issued by companies from the following industries:

In addition, there is the first Russian stock index MICEX-10, which is calculated based on the rates of the 10 most liquid stocks traded on MICEX. This index is not a weighted index and does not take into account the market capitalization of companies. It is an arithmetic average of the rates of the securities included in it. The listing of shares is reviewed once a quarter. Currently, the MICEX 10 Index uses the following companies’ shares in its calculations: VTB, Rosneft, LUKOIL, Surgutneftegaz, Gazprom, Uralsvyazinform, Tatneft, Sberbank of Russia, Polyus Gold and MMC Norilsk Nickel.