MARKET PERFORMANCE

EQUITY & BOND MARKET

The Equity and Bond Market is a liquidity center for operations with Russian securities and the main platform for Russian companies to raise capital. MOEX is a leading venue for issuance and trading of shares and depositary receipts of Russian and “quasi-Russian” shares; regional and corporate bonds; sovereign and corporate Eurobonds; mutual funds and Russian-law ETFs.

Trading results

At the end of 2023, total trading volumes on the Equity and Bond Markets totalled RUB 23 trillion, and RUB 39.9 trillion (including secondary market volume of RUB 11.4 trillion), respectively.

Eight initial public offerings (IPOs) and four secondary public offerings (SPOs) totalling about RUB 145 billion took place. In 2023, the volume of corporate bond placements more than doubled versus 2022 (RUB 2.68 trillion) totalling RUB 5.47 trillion excluding overnight bonds. A record 206 issuers placed bonds on MOEX in 2023. The volume of Russian government bond (OFZ) placements in 2023 totalled RUB 2.48 trillion.

Attracting retail investors

In 2023, the number of individuals with brokerage accounts on MOEX increased by almost 30% to 30.1 million, and the number of accounts opened increased by more than 33% from 44.9 million to 59.8 million accounts.

Over 3 million people transacted on the Equity Market monthly (2.3 million in 2022). In September-December 2023, more than one million people traded every day. The total number of active retail investors who executed at least one trade during 2023 reached a record 7.6 million people.

The share of retail investors in equity trading increased to 82% from 60%. Retail investors accounted for 19.5% (2022: 17.6%) of the OFZ Central Order Book trading and 47.6% (2022: 42.4%) of the Central Order Book for corporate bonds.

The volume of retail investors’ investments in securities totalled RUB 1.1 trillion, including RUB 393.5 billion in shares and exchange-traded funds and RUB 715 billion in bonds.

In 2023, the number of individual investment accounts (IIA) increased by 560 thousand to 5.8 million. In 2023, the total turnover of IIAs rose by 47% to RUB 2.5 trln with the majority of activity being in equities, accounting for 84% of the turnover. Bonds accounted for 10.6% of the turnover, while ETFs made up 5.4%.

Collective investment

As of the end of 2023, there were 82 ETFs as well as 100 mutual funds (open-end, interval and closed-end mutual funds) of 38 asset management companies.

In 2023, the net asset value of exchange-traded funds tripled to about RUB 380 billion, and the number of shareholders reached 4.8 million.

Nine new exchange-traded funds started trading in 2023. The efforts made in 2022 (launch of the CNY-denominated Money Market benchmark RUSFAR CNY and the CNY-denominated Russian bond index, as well as the introduction of trading modes for purchase and sale transactions in CNY-denominated mutual funds) allowed to start trading in three CNY-denominated Russian-law ETFs: two funds on RUSFAR CNY, as well as an ETF tracking the CNY-denominated Russian bond index.

The ETFs of the Money Market developed actively in 2023. In 2023, the net asset value of Russian-law ETFs of the Money Market increased almost 12 times, reaching RUB 226 billion at the end of the year. In 2023, net inflows to Money Market ETFs totalled around RUB 190 billion, or 92% of the total net asset inflows to Russian-law ETFs.

In addition, three new Money Market ETFs started trading in 2023: a RUB-denominated RUSFAR fund and two Russian-law ETFs on RUSFAR CNY.

Migration to T+1 settlement cycle

On 31 July 2023, Moscow Exchange switched trading in shares and bonds to a single T+1 settlement cycle. This means that trades in the Central Order Books of all Moscow Exchange markets are settled and assets are delivered on the next trading day after the trade date (previously, on the second trading day).

The shorter settlement cycle has increased the convenience of trading and settlement for both trading and clearing members and all investor groups.

Synchronisation of settlements with other markets allowed to reduce time costs of market transactions and facilitate liquidity management mechanisms, as well as eased the compilation of the trading and settlement calendar of the Equity Market for holidays. Furthermore, the move to the T+1 settlement cycle provided an additional trading day for corporate events of Russian public companies, including an additional trading day until the cut-off date before dividend payments.

The transition to the T+1 settlement cycle is a global trend followed by major trading venues. India and China have already switched to T+1, US exchanges are planning to switch in 2024, and European trading platforms are actively discussing the move.

After-hours trading session

The share of after-hours trading increased to 12% (2022: 8.9%, 2021: 8.1%) of total trading volumes of the Equity Market. Retail investors were the most active participants of the after-hours trading session, with trading volume of RUB 2.6 trillion. Almost 2.5 million unique clients, or 32% of the total number of retail investors, traded after-hours in 2023.

In 2023, 20 shares were admitted to the evening trading session, including shares not in the MOEX Russia Index. The criteria for admission are the liquidity of securities and investor interest.

Boosting liquidity

Boosting securities other than the MOEX Russia Index

The Exchange continued improving liquidity of stocks other than those in the MOEX Russia Index (IMOEX), and was in constant interaction with issuers from the Level 2 and Level 3 Lists regarding market making, raising the listing level, and expanding analytical coverage.

In 2023, the trading volume of non-IMOEX stocks was around RUB 10 trillion, or an average of 27% of trading volumes of stocks on MOEX.

Market maker programs

The IMOEX+ and Good Evening open market maker schemes continued to develop in 2023. The programs were updated in line with the current Equity Market conditions: the number of instruments increased from 41 to 50 in IMOEX+ and from 48 to 64 in Good Evening. Programs participants were involved to improve efficiency and increase the number of quoted securities.

Tri-party market maker agreements were successfully used to support the liquidity of individual instruments, where market maker services were sponsored by the issuers. Liquidity in ETFs was successfully provided by market makers in all trading modes.

To enhance liquidity for replacement bonds, an open market maker program was launched on 21 June 2023. By the end of 2023, the program covered 35 replacement bonds of 10 major issuers, with each security having individual parameters for the market maker’s obligations, selected in such a way as to reduce transaction costs for a retail investor.

ОТС market with the CCP Secondary market

On 10 April 2023, Moscow Exchange offered professional market participants and their clients an OTC trading service for Russian shares not listed on MOEX with settlement through a central counterparty (OTC with the CCP).

In 2023, 28 securities (27 Russian shares and one DR) were added to the list of non-listed securities for OTC with the CCP.

The list is formed on the basis of data from the MOEX Board indicative quotation system, which includes over one thousand shares of Russian companies, taking into account trading volumes in a security, compliance with the disclosure requirements, the availability of financial statements and investor interest.

The new segment is available only to qualified investors. Only qualified investors can buy securities, while selling is available to all. Participants do not need to set up an additional connection to the platform. Brokers independently regulate access to trading for their clients.

Anonymous and negotiated trades are available.

In 2023, the total volume of OTC trades with the CCP was about RUB 54 billion.

Raising equity capital by non-public companies

In December 2023, the capital raising service for non-public joint stock companies was technology-ready. Issuers together with managers will be able to offer shares by private subscription among professional participants and their clients – qualified investors.

Currently, the pool of potential managers is being formed to compile an expert council to admit issuers to the new placement regime.

Development of the OTC segment for bonds

In April 2022, an OTC bond trading service with a central counterparty (OTC: Bonds with CCP) was successfully launched, which quickly became popular due to its ease of use, wide range of instruments and the ability to make direct negotiated trades with the CCP without the need to open mutual counterparty limits.

In 2023, CCP-cleared negotiated trading volumes exceeded RUB 1.7 trillion, which is 6.3 times higher than in 2022. 24% of the trading volume was made with voice brokers. CCP-cleared negotiated trading accounted for 15.2% of the whole secondary bond market. The number of trading members using the service reached 136. As of the end of 2023, 2,988 instruments were available for trading with the service, including 592 non-listed bond issues.

Replacement bonds are the most popular market segment

Emerging as a response to the difficulty of servicing Eurobonds in foreign infrastructure, replacement bonds have become the fastest growing and most active market segment offering foreign currency yields without infrastructure risk. At the end of 2023, there were 47 replacement bond issues of 13 issuers trading on the exchange, with a total volume of around RUB 1.7 trillion. Replacement bonds made up 29% of the total trading volume of corporate bonds in the Central Order Book. Individuals accounted for more than 56% of the trading volumes of replacement bonds.

Yuan-denominated bonds – a new market trend

August 2022 saw the first placement of local bonds in Chinese Yuan amid a rapidly growing resource base of investors seeking to diversify their foreign currency savings. At the end of 2023, 25 yuan-denominated bonds of 13 issuers traded on MOEX, worth around RUB 0.9 trillion. In 2023, Central Order Book trading volumes in the bonds totalled RUB 59 billion, up 2.2 times YoY (2022: RUB 27 billion).

Floaters – bonds in a rising rate environment

Against the backdrop of rising interest rates from the second half of 2023, investors are demanding ever higher compensation for market risk. One of the solutions that kept the primary market active and helped to find a balance between the interests of issuers and investors was the issuance of bonds with coupon rates linked to floating benchmarks. In 2023, 44 issuers placed floaters worth RUB 1.4 trillion, which accounted for 35% of the volume of corporate bond placements in August-December or 26% for the whole of 2023.

Attracting SMEs

To encourage SMEs to tap the public markets, the Growth Sector is available on Moscow Exchange. The Growth Sector is intended to attract funds to high-potential companies in the real sector of the economy, to expand the range of traded instruments and to diversify investors’ allocations.

The Growth Sector is supported by the Federal Corporation for Small and Medium-Sized Enterprises (SME Corporation), SME Bank and the Russian Ministry of Economic Development. The main partner of this initiative is the Bank of Russia.

As part of the implementation of the SME national project, SME issuers have access to financial support instruments. In order to implement the mechanism to compensate SME issuers for the costs of going public, subsidies are provided to reimburse the issuers’ expenses on the services of book runners and rating agencies, as well as on the payment of coupon income on bonds. SMEs will also receive support in the form of sureties/guarantees for bond issues from SME Corporation and participation of SME Bank as a co-organiser and anchor investor.

For a bond to be admitted to the Growth Sector, the issuer must meet basic requirements:

• revenue for the last reporting period not less than RUB 120 million;
• the issuer has been existed for at least three years;

• a credit rating of at least BB- on the Russian scale (does not apply to issues with a guarantee from SME Corporation or “anchor” investments by SME Bank).

In 2023, the volume of SME bond placements in the Growth Sector was RUB 11.3 billion. As part of subsidising pre-listing, 22 bond issues of SME issuers were financed in the amount of RUB 45.5 million, and subsidies on bond coupon rates were provided in the amount of RUB 680 million for 53 transactions.

Moscow Exchange supports SME issuers by maintaining a preferential listing fee for SME issuers issuing bonds in the Growth Sector; SME issuers have not been charged a listing fee when issuing bonds of up to RUB 400 million (the preferential period extends to 31 December 2024).

Innovation and Investment Market

Moscow Exchange successfully operates the Innovation and Investment Market (IIM), which was created to promote investment in the innovation sector of the Russian economy.

By the end of 2023, 30 securities were traded in the IIM Sector: 10 shares, 19 bonds and one pre-IPO closed-end mutual fund. The total capitalisation of the sector amounted to about RUB 630 billion. Total trading volumes exceeded RUB 470 bln.

In 2023, the IIM Sector hosted seven bond issuer placements with a total issue volume of RUB 28 billion, as well as twoIPOs totalling RUB 740 million.

To encourage technology companies to enter the exchange, the following government support tools have been envisaged:

• tax relief (personal income tax) on income from the sale or other disposal of shares, bonds of Russian organisations, investment units that are securities of the high-tech (innovative) sector of the economy, provided that they have been continuously owned by the taxpayer for at least one year as of the date of their sale;
• tax relief applies to transactions in shares of high-tech companies with a market capitalisation of no more than RUB 75 billion, bonds of issuers with annual revenue of no more than RUB 75 billion, and investment funds with NAV of no more than RUB 75 billion;
• within the framework of the initiative Taking off – from Start-up to IPO, small innovative enterprises are provided with grant support to co-finance innovative projects from the Federal State Institution “Foundation for Assistance to Small Innovative Enterprises in Science and Technology”. The grant ceiling is RUB 30 million, part of which can be spent on the listing activities (legal, investment bank services, marketing and other services).

To ensure that SME issuers from high-tech sectors are eligible for tax benefits in addition to support under the national project “Small and Medium Enterprises”, the Exchange has cancelled the restriction on simultaneous inclusion of securities in the Growth and IIM sectors in March 2023.

Sustainability Sector

Moscow Exchange facilitates the implementation of sustainability principles by Russian companies, improve the quality of sustainability disclosure and create an environment for responsible investment.

One of the Exchange’s priority tasks is to develop infrastructure for “green” investment on the Russian market. In 2019, Moscow Exchange established the Sustainability Sector, where bonds are traded to finance environmental and social projects.

Currently, the Sustainability Sector includes the following segments:

• Sustainability Bonds Segment (green, social and sustainability bonds);
• A segment for Sustainable Development Goals (sustainable development goal bonds and climate transition bonds);
• A segment dedicated to national and adaptation projects.

In 2023, eight new bond placements totalling RUB 141 billion took place in the Sustainability Sector.

In 2023, a total of 32 securities of 17 issuers with a total volume of RUB 379.8 billion were traded in the Sustainability Sector, including 19 issues of “green” bonds, five issues of social bonds, two issues of sustainability bonds, five issues of national bonds and one issue of adaptation bonds.

Primary Equity and Bond Market

An Initial Public Offering (IPO) is a major milestone for an issuer, designed to raise additional capital to finance its growth and development, and to assess the fair market value of the company. In 2023, 13 equity capital market transactions totalling RUB 145 billion were conducted on the Exchange.

Moscow Exchange is the primary platform for attracting debt capital to the economy. In 2023, the volume of primary placements of corporate bonds was more than RUB 5 trillion.

To promote the primary market, Moscow Exchange pays great attention to educational and awareness-raising activities aimed at both owners and top managers of issuers, as well as professional intermediaries and consultants.

In 2023, issuer guides were updated:

• The Issuer’s Guide to Bonds: How to Enter the Public Debt Market. The Bond Guide is intended for both companies planning to enter the public debt market and experienced borrowers. The guide contains up-to-date information on all stages of preparation of bond issues, primary placement, trading and redemption of bonds;
• ESG Practices Guide “Issuer’s Guide: How to Meet Sustainability Best Practices”. The guide is aimed at companies that are committed to the principles of sustainability and being transparent to customers, counterparties and investors;
• IPO Guide, the authors of the new edition are representatives of the investment community. In the updated guide, we have tried to cover the most significant and important aspects of the whole process, including preparation, the IPO and life after the IPO.

To effectively address issues related to the primary market, the Exchange has advisory bodies:

• The Primary Equity Market Committee, which includes participants in the IPO process;
• The Bond Issuers Committee, which includes bond issuers and securities market experts.

In March 2023, Moscow Exchange held its first IPO seminar on practical aspects of IPOs in Russia. The seminar was attended by representatives of companies from various sectors of the economy that are considering going public.

Listing of securities

As of the end of 2023, 3,501 securities of 1,306 issuers were admitted to trading, including 899 shares and depositary receipts of 856 issuers and 2,411 bonds of 473 issuers. MOEX’s quotation lists include 1,026 securities of 243 issuers: the Level 1 includes 657 securities of 141 issuers and the Level 2 includes 369 securities of 120 issuers.

In 2023, work was continued to inform investors about the quality of listed securities, as well as increased investment risk for a particular security: 52 securities of 35 issuers were included in the Sector of High Investment Risk Companies.

The Exchange is actively working with small- and medium-sized enterprises (SMEs), supporting the development of the SME national project. For five consecutive years, Moscow Exchange has maintained preferential tariffs on listing services to SME issuers.

As part of the work to develop the Sustainability Sector, and as the regulatory framework has been updated, the Sector has been able to add new types of bonds:

• bonds related to the Sustainable Development Goals;
• climate transition bonds;
• adaptation bonds.

There were 32 securities in the Sustainability Sector at the end of 2023, eight of which were included in the Sector in 2023.

DERIVATIVES MARKET

In 2023, Moscow Exchange continued to actively promote Derivatives Market instruments and services. Today, 196 derivatives are available to clients, 18% of which (37 contracts) were launched in 2023. The underlying assets of futures and options include stock indices, single stocks, currency pairs, precious and industrial metals, oil, gas and other commodities, as well as interest rates.

The expansion of the range of instruments was the main factor behind the active arrival of new clients into the Derivatives Market, with 100,000 clients joining the market in 2023.

Individuals’ trading activity also increased: In 2023, 331,000 individuals made trades, up 12% YoY, with 155,000 clients making trades in November, an all-time high for MOEX’s Derivatives Market. In December 2023, trading volumes was twice as high as in December 2022 and totalled RUB 8.6 trillion.

At year-end, trading volumes on the market exceeded RUB 80 trillion. The number of active clients increased by 16% to 355 thousand.

Trading volumes

In 2023, total trading volumes on the Derivatives Market amounted to RUB 80.7 trln (RUB 77.9 trln in 2022), including futures trading volumes of RUB 77.9 trln and options trading volumes of RUB 2.9 trln.

New instruments

2023 was one of the most productive years in terms of the number of instruments launched: 37 new contracts started trading, and trading volumes exceeded RUB 290 billion at year-end. The list of new products included futures on currency, gold, stocks, commodities, as well as perpetual futures and premium-style options.

Premium-style options on shares of Moscow Exchange, MTS, Positive Group, Rosneft and Tatneft were offered in 2023, allowing Derivatives Market clients to implement a wider range of trading strategies. Trades in the new options were made by more than 15 thousand people for a total turnover of over RUB 2 billion.

In January 2023, a futures contract on the US dollar-Chinese yuan currency pair was launched. MOEX also launched futures on the Turkish lira-Russian rouble currency pair and Hong Kong dollar-Russian rouble in March 2023 and United Arab Emirates Dirham-Russian rouble and Indian rupee-Russian rouble futures contracts in April.

Cash-settled futures on the ETFs tracking the German DAX index and the Japanese NIKK index became available to private and institutional investors in 2023. They offer Russian clients the opportunity to benefit from price movements in foreign markets without infrastructural risks. Last year, more than 4,000 investors took advantage of price movements in the new futures.

In April, a futures and premium-style option on Human Stem Cell Institute shares was launched. 3,800 clients made trades in these instruments for more than RUB 630 million 12 new futures contracts on shares of Whoosh Holding, Softline, Astra, Beluga and other companies was also launched. In total, more than 21,000 clients traded in the new instruments of the equity section in 2023.

The expansion of perpetual futures offering allowed clients to widen the range of trading strategies involving Russian gold in roubles and the MOEX Russia Index. GLDRUBF and IMOEXF futures were launched in July and November, respectively. Their aggregate trading volume exceeded RUB 18 billion, and more than 10,000 clients made trades in 2023.

In September, trading in derivatives on the sugar index (trade code SUGAR), calculated by Moscow Exchange Group and tracking the price of Russian sugar, was launched. Trading turnover of the new instruments totalled RUB 125 million.

In the fourth quarter of 2023, trading in premium-style options on gold and the MOEX Russia Index began. The advantages of these instruments are simple calculation of the financial result and no intermediate exposure to futures.

Technological development

The most significant technological project in 2023 on MOEX’s Derivatives Market was the introduction of an options calculator. The service allows modelling trading strategies with Derivatives Market instruments and scenarios of price movements of underlying assets, as well as to calculate strategy parameters online. The functionality of the calculator makes it much easier to understand options trading strategies and helps to increase trading activity.

In addition, the Derivatives Market launched an opening auction in 2023 to reduce the probability of sharp price movements at market opening.

The new mechanisms are designed to increase the efficiency and liquidity of MOEX’s Derivatives Market.

Standartised OTC Derivatives Market

The Standardised OTC Derivatives Market is Russia’s only marketplace offering the ruble yield curve based on interest rate derivatives. The market trades interest rate swaps, currency swaps, cross currency swaps, currency forwards with maturities ranging from three days to ten years, depending on the type of instrument. NCC acts as a clearing house and central counterparty on the Standartised OTC Derivatives Market. This saves market participants from having to assess the risks of each counterparty and sign master agreements, reduces capital costs and allows them to take advantage of unified clearing and collateral across Moscow Exchange’s markets.

Trading volumes

In 2023, total trading volumes on the market exceeded RUB 4.4 trillion, of which currency derivatives accounted for RUB 2.5 trillion and interest rate derivatives for RUB 1.9 trillion. Open interest in the market instruments approached RUB 5 trillion.

Expanding the range of instruments

From February 2023, the maximum term for currency swap transactions, as well as deliverable and cash-settled currency forwards with the currency pair Chinese yuan – Russian rouble will be increased to five years. Previously, the term of transactions in these instruments did not exceed one year. The longer terms of swap and forward transactions in Chinese yuan-Russian ruble currency pair allowed market participants to get an idea of the cost of funding in yuan on a horizon of more than one year.

It is now possible to choose the exchange rate for transactions in cash-settled currency forwards in all underlying assets – MOEX FX fixing or the Bank of Russia rate. The Bank of Russia’s rate is available for all ruble currency pairs.

In July, a cross-currency fixed-rate CNY interest rate swap with maturities ranging from three days to five years became available to the participants of the Standartised OTC Derivatives Market, allowing them to limit the impact of exchange rates and reduce foreign currency funding costs.

In December, the market launched floating rate interest rate swaps and cross-currency interest rate swaps with maturities ranging from three days to five years. The launch of these instruments was the final stage of implementing a full range of market solutions to effectively manage currency and interest rate risk and liquidity in the Chinese yuan. The new instruments will provide participants with the ability to lengthen transactions in the yaun and hedge interest rate risk for maturities greater than one week. This is an important factor that enhances the ability to effectively balance risks across the full range of CNY transactions: lending, taking deposits, and hedging currency and interest rate risks.

Technological development

In 2023, the Standartised OTC Derivatives Market successfully completed the transition from MosPrime Rate and LIBOR benchmarks to RUONIA and SOFR, respectively, in interest rate and cross-currency interest rate swaps. The transition to risk-free benchmarks, such as RUONIA and SOFR, increased the transparency and quality of market pricing.

In addition, a new procedure for early termination of Standartised OTC Derivatives Market contracts was defined. The amendments provide for an offset transaction, the terms of which are identical (except for the terms of the additional payment) but differently directed from the terms of the outstanding Standartised OTC Derivatives Market contract, and both contracts are recorded on the same position register.

FX AND PRECIOUS METALS MARKETS

As part of the implementation of the Group’s new strategy, MOEX’s FX Market was developed in a number of important areas. To ensure the transformation of the foreign trade payment and settlement system, the product line and trading hours of national currencies were expanded. To diversify the business and meet the needs of clients, the development of OTC services and the introduction of innovations aimed at increasing the liquidity and stability of the exchange market continued. The client base was actively expanded by attracting corporations and private investors. Emphasis was placed on the development of international relations and integration processes with participants from friendly countries.

Growth of operations with friendly currencies

In 2023, the following projects were implemented as part of the development of operations in national currencies:

• Trading hours for instruments with “today” settlement for Chinese yuan (CNY) and Hong Kong dollar (HKD) were extended until 19:00 Moscow time. In December 2023, more than 20% of trades in Chinese yuan with “today” settlement were made in these extra hours;
• The Exchange began accepting Kazakhstani tenge as collateral, which allows professional market participants and their clients more flexibility in financing their own operations, increases the efficiency of free funds utilisation and promotes the growth of trading activity;
• new instruments were launched for the Chinese yuan-Russian rouble pair, which allow participants to trade at the average weighted exchange rate of the yuan (the Bank of Russia rate) and at the Exchange’s FX CNY fixing. The launch of this kind of instruments increases the convenience of conversion operations for market participants and facilitates hedging currency risks.

Active work is underway to improve the conditions for trading in national currencies, which contributes to an increase in the trading volumes.

• In 2023, trading activity in the currencies of friendly countries continued to grow: up 4 times in CNY/RUB, up 4.7 times in KZT/RUB, up 9 times in BYR/RUB and up 10 times in TRY/RUB.
• The share of trading accounted for by national currencies against the ruble in the total volume of MOEX’s spot trading reached 45% in December 2023 versus 26% at the beginning of the year. The share of trading accounted for the USD/RUB pair decreased from 40% to 31%, and the EUR/RUB pair fell from 20% to 12%.

Promotion of FX Market OTC services

One of the main principles of development of the FX Market has become the multiple-choice offer of services for order execution for different types of clients and clearing. In 2023, the OTC services launched earlier were further developed.

• After-hours trading was resumed in the CCP OTC trades clearing service. Trading in spot instruments and overnight swaps was extended.

• Turkish Lira-Russian Rouble, US Dollar-Turkish Lira, Hong Kong Dollar-Russian Rouble and US Dollar-Hong Kong Dollar currency pairs were added to the CCP OTC trades clearing service.
• RUBKZT_TOM instrument providing additional liquidity in Kazakhstani tenge was launched in OTC trading mode.
• The Kazakhstani tenge-Russian ruble, Belarusian ruble-Russian ruble and Turkish lira-Russian ruble currency pairs became available in the Request for Stream (RFS), a service for converting large currency liquidity.

Attracting Russian investors and corporates

One of the important tasks in the development of the FX Market was the refocusing of on-exchange products and services towards Russian counterparties.

• At the end of the year, the number of registered clients exceeded 16 million increasing twofold YoY (December 2022: 8 million clients). In December 2023, the number of registered clients reached 29.6 million, up 30% YoY (December 2022: 22.9 million clients).
• The share of individuals in spot transactions was 18% (20% on average for 2022).
• The share of Russian legal entities, companies and organisations in spot transactions tripled to 26% in December 2023 (December 2022: 9%).
• Direct access to trading on the FX Market was granted to 16 companies. In total, more than 70 corporations, including insurance companies, have access to the market.

Development of international relations and integration processes

Direct access to the FX and Derivatives Markets for banks and brokers from friendly countries should play an important role in the development of operations with national currencies, which became possible in September 2023, following amendments to the Federal Law “On Organised Trading” and the publication of a resolution of the Government of the Russian Federation with a list of friendly countries. Prior to that, only non-resident banks from the EAEU countries and Tajikistan were admitted to on-exchange trading within the framework of the integrated FX market of the EAEU countries.

In 2023, there was a steady increase in the activity of banks from the EAEU/CIS countries on the market.

Measures to improve market liquidity and stability

Moscow Exchange pays great attention to ensuring financial stability by introducing technologies, control functions and parameters aimed at improving liquidity and stability of the FX market.

• A mechanism for monitoring the aggressiveness of limit orders has been introduced, which sets the maximum deviation of the trade price from the value of a counter order at 1%.
• In accordance with the regulator’s requirements, a ban on cross trades on the FX Market was introduced. At the same time, trading members may choose the method of rejecting cross orders in the order book trading, as well as ban or permit cross trades in negotiated trading.
• An option to place “hide quantity” orders has been added for swap instruments in the order book trading.
• Users of the Trade Radar terminal now can place negotiated orders on the FX Market. The new functionality allows to send a request to find a counterparty for a negotiated trade and submit a subsequent order based on the electronic tickets generated from the negotiations in the Trade Radar (MOEX Dealing) desktop application.
• A new type of Book or Cancel order has been introduced; for the convenience of makers, an order is put in the order book only if there is no valid counter order.

The development of the national benchmark system is important for ensuring financial stability. On 1 June, changes to the exchange’s fixing calculation methodology came into effect, increasing the MOEX FX fixing calculation period from 5 to 15 minutes.

In 2023, the calculation and publication of new FX fixings for Hong Kong dollar-Russian ruble (HKDFIXME), Turkish lira-Russian ruble (TRYFIXME) and US dollar-Chinese yuan (USDCNYFIXME) pairs began.

Precious metals market development

There are 110 companies trading on MOEX’s Precious Metals Market: 65 banks, 36 professional securities market participants (brokerage and asset management companies), eight corporations, including gold mining companies, and the Bank of Russia.

In 2023, 13 new trading members entered the Precious Metals Market, including three from the EAEU countries. The direct access option for trading members from the EAEU countries appeared in 2023.

In February 2023, the calculation of the RUGOLD refined gold price benchmark was launched. In 2023, the gauge was approved by the Bank of Russia, and the quality of index construction and calculation was assessed with the participation of the Federal Antimonopoly Service, the Ministry of Finance and the Ministry of Economic Development. RUGOLD became the underlying asset for MOEX’s derivatives: cash-settled gold futures and premium-style gold options.

In 2023, trading volumes on MOEX’s Precious Metals Market totalled RUB 469.8 billion.

MONEY MARKET

Moscow Exchange’s Money Market is the largest segment of the Russian financial market, through which market participants place and raise funds secured by securities.

Trading members have access to repo transactions with and without the central counterparty (CCP), including repo transactions in general collateral certificates (GCC). RUSFAR, a Money Market benchmark recognised by the Bank of Russia is calculated on the basis of the GCC repos as the most liquid and efficient market segment. In addition, the Money Market offers deposit and lending transactions.

Trading volumes

In 2023, total Money Market trading volumes amounted to RUB 837.6 trillion.

Repo trading volumes totalled RUB 659.9 trillion, (78.8% of total Money Market volumes); trading volumes of non-CCP deposit and credit transactions totalled RUB 177.7 trillion.

The year-on-year increase in total market trading volumes was the result of a 36.2% increase (to RUB 587.6 trillion) in the volume of repo transactions with the CCP (including GCC repo and deposits with the CCP).

Trading volume of CCP-cleared repo transactions (excluding GCC and deposits with the CCP) was RUB 364 trillion, up 21.9% YoY. The average daily open interest was RUB 3.6 trillion.

Expanding the range of instruments

In 2023, Moscow Exchange provided participants with additional opportunities for more flexible liquidity and interest rate risk management on long maturities, such as floating rate transactions, as well as the ability to enter into open-dated repo transactions. By the end of 2023, the volume of the open position on floating rate CCP transactions totalled about RUB 800 billion, and the average term of such transactions reached 115 days.

The Exchange continued to develop the yuan segment of the Money Market and its liquidity. A weekly market maker program was launched, and the RUSFAR weekly CNY benchmark was launched. In addition, CCP deposit market participants were able to place deposits in CNY for up to one year, previously only overnight transactions were available.

In October 2023, a Request for Quotation (RFQ) service was launched to help participants find counterparties for repo, deposit and lending transactions with the most favourable terms.

Attracting new participants

In 2023, real economy companies showed a growing interest in the Money Market.

As at the end of the year, 236 participants were admitted to this segment of the Money Market.

In addition, the tools of the CCP-cleared deposit market were developed:

• the option of partial repayment of deposits with the CCP in CNY was introduced;
• the option of admission of rating agencies and exchanges to deposits with the CCP was added.

In 2023, active development of MOEX Treasury platform for Money and FX Markets clients continued:

• implemented analytics building service in MOEX Treasury for the CCP-cleared deposit market and FX market;
• global lenders were given the opportunity to work with MOEX Treasury;
• the option for auctions in Chinese yuan on the M-Deposits market was added;
• Request for Quotation (RFQ) service was implemented on the deposit market with the CCP;
• the interface for platform users was finalised.

COMMODITIES MARKETS

Moscow Exchange Group promotes commodities trading through two key commodities markets: precious metals and agricultural. Precious metals are traded on the MOEX FX Market platform, while trading in agricultural products is operated by the National Mercantile Exchange (NAMEX), part of the Moscow Exchange Group.

On-exchange trading in agricultural products

In 2023, NAMEX continued to develop the commodity auction market. Commodity auctions are a simplified mechanism for trading new products with direct admission to trading for customers and auction participants. Transactions on the market are not cleared. The customers of the auctions are legal entities, such as large exporters, processors and producers of agricultural products. The customer of the auction determines the main parameters of the auction: delivery terms, basis, starting price, minimum price step, etc. Any legal entities and individual entrepreneurs can participate in auctions. Commodity auctions continued to attract great interest of market participants: 270 companies joined the auction in 2023 (170 companies joined in 2022). The total number of trading members in the commodity auctions exceeded 500 companies. In addition to the most in-demand instrument, wheat on the Novorossiysk CPT basis, the market saw transactions in soybean and rapeseed arranged by Sodrugestvo Group, a major Russian oilseed processor, as well as in barley, corn, sunflower and sugar.

In October 2023, NAMEX launched milk and dairy products auctions. EkoNiva Group acted as the seller and customer of the auction.

In 2023, the volume of agricultural products traded on the commodity auction market totalled RUB 31.4 billion, or 1.46 million tons (2022: RUB 16.3 billion, or 1.03 million tons).

In 2023, trading in sugar continued in the form of a bilateral anonymous auction, where NSD clears and settles sale and purchase agreements concluded on the Exchange. In 2023, trading volumes on the sugar market was RUB 15.2 billion, a twofold increase versus 2022 (RUB 7.6 billion).

NAMEX is Russia’s authorised exchange for state commodity and procurement interventions on the grain market. In December 2023, grain purchases to the state intervention fund were made in the amount of 260.1 thousand tons worth RUB 3.6 billion.

Commodity indices

In 2023, NAMEX continued to develop a range of OTC and exchange-traded commodity indices.

OTC commodity indices are based on OTC contracts of agro-industrial market participants registered in member personal account with NAMEX.

Thus, in 2023, more than 166,000 OTC contracts with a total volume of more than 160 million tons were registered by agricultural market participants through personal accounts (in 2022, 102,000 contracts with a total volume of more than 76 million tons).

The volumes of OTC contracts being registered and the development of the OTC contract registration service via an API interface allowed NAMEX to start calculating three daily OTC regional sugar indices (sugar value in the Central Federal District, Volga Federal District, Southern Federal District and North Caucasus Federal District) in August 2023.

In May 2023, digital logistics platform Smartseeds became a NAMEX partner. The partnership made it possible to construct and publicly disclose to market participants on the NAMEX website a benchmark of the cost of logistics services, which is formed on the basis of data from the Smartseeds platform. Participants in state grain market interventions and NAMEX’s commodity auctions were also given the opportunity to order transportation of sold grain through Smartseeds at a fixed tariff within two weeks.

In October 2023, NAMEX started daily calculation and publication of the price index for soybeans. The soybean price index is calculated based on the results of commodity auctions held by NAMEX for the purchase of soybeans on DAP (Delivered at Place) delivery terms to Kursk region and reflects the cost of one tonne of the commodity.