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Russian Trading System Stock Exchange. Opportunities of Derivatives market for foreign investors. Russian Derivatives market. Derivatives market – the fastest growing, the most profitable segment of the Russian financial market . 200 7 – until now this year has been - PowerPoint PPT Presentation
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Russian Trading System Stock Exchange
Opportunities of Derivatives market for foreign investors
Russian Derivatives market
Derivatives market – the fastest growing, the most profitable
segment of the Russian financial market.
2007 – until now this year has been
the most profitable year in the history
of derivatives market:
•Rapid growth of trading volume
•Steep growth of number of trading participants
•Legislation improvements
•Infrastructure changes
The facts above create a solid base for the future market development
FORTS (Futures and Options on RTS)
1. Legal defence of futures contracts (the law was adopted by the governmental authorities and signed by RF President on January 26, 2007)
2. Cancellation of limitations for capital transactions with currency
3. Macroeconomic policy helps further economics and financial market development
4. The process of overflow of the main share of the derivatives on Russian assets to Russia
Positive factors that promote development of derivatives market
FORTS (Futures and Options on RTS)
FORTS (Futures and Options on RTS) is a derivatives division of the Russian Trading System Stock ExchangeFORTS has 13 years experience in futures and options trading
FORTS is a leader of the Russian market in:•Monthly Trading volume – 27 bln US dollars•Number of traded contracts - 53•Number of active market participants - 90•Number of accounts - 20000Last Records:Daily open interest exceeded $9,5 billion. Daily trading volume grew to $1,8 billion.
FORTS – is a reliable and technologically advanced market
Russian derivatives market
Market DynamicsFORTS is•in the international exchanges top-20 by trading volume •the world leader in the single stock derivatives segment•the fastest growing segment of the Russian financial market
Russian derivatives market
Derivatives daily average values per month, 2001-2007
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Trading volume, mln.USD
Open interest, mln.USD
Volume examples
Monthly trading volume of futures and options contracts on IOB Index on LSE
45 mln USD
Monthly trading volume on futures and contracts on RTS Index
15 bln USD
Monthly trading volume on futures contracts on Rebco oil on NYMEX
0
Monthly trading volume on futures contracts on Urals on RTS
32 mln USD
Conclusion: financial instruments on Russian assets have better liquidity in Russia
Why Russian Derivatives market?
Wide range of instruments
FORTS (Futures and Options on RTS)
FORTS offers a wide range of derivative instruments:Equity derivatives:-Futures on 15 most liquid shares-Options on 15 most liquid shares Index derivatives:-Futures on RTS Index and RTS Sectoral Indices-Options on RTS IndexBond futures:-Futures on 12 most liquid bondsShort terms Interest Rate futures-MosIBOR Futures-MosPrime Futures Currency derivatives:-Futures on UDS-Option on USDCommodity derivatives:-Physical Delivery Gas oil futures-Futures on Gold and on Silver-Futures on Oil (Urals)-Options on Gold
FORTS (Futures and Options on RTS)
•Highly liquid market•Aggregation of demand of local and global market participants •A large number of market participants (more than 14 thousand of clients’ accounts)•A wide range of instruments •An opportunity of arbitrage with western financial markets
FORTS advantages
FORTS – maximum opportunities for international investors
• Hedging of positions in Russian assets (both portfolios and separate securities)
• Hedging of positions in rubles and USD• An opportunity to make money on volatile and
bear market• Making arbitrage deals• An opportunity to trade with Russian
counterparties• Offering clients trading on the Russian market
(DMA, Structured Products)
RTS Index Derivatives
•Futures on the RTS Index was launched in August 2005•Option on RTS Index future was launched in September 2005•Within 6 months RTS Index has become the most popular Russian derivative•Open interest is over 2,4 bln dollars
RTS Index is the benchmark of the Russian stock market•Calculated since 1995•Capitalization-weighted, with free-float coefficients•Consist of 50 preferred and common shares•Calculated real-time
RTS Index is included in the Standard&Poor’s Index Global Portfolio
Current market capitalization of companies included the RTS Index as of Sept 25 is $935 bln.
Russian derivatives market
Money market derivatives
Russian derivatives market
Effective instrument for hedging of risks in domestic Russian assets
- Futures contract on exchange RUR\US dollar rate
- Option on futures contract on exchange RUR\US dollar rate
- Futures contract on short-term interest rate
Commodity Derivatives
-February 20th, 2007 Started of physical delivery futures contracts on Gas oil
-Sugar futures launched 19 September, 2007
-Weather derivatives will be launched in November, 2007
-Futures contracts on oil Cash-settled futures contracts on export oil Urals. Settlement based on pricing information supplied by Platts (Urals-ex-Baltic Sea CIF R'dam)
-Futures and options on gold
-Futures contracts on silver
Russian market instruments
• Main Russian banks (Sberbank, Gazprombank, VTB, Alfa-bank, NRB, etc.)
• Global investment banks (CSFB, Deutsche Bank,
Raiffeisenbank Austria , UBS)
• Leading Russian investment banks (Troika Dialog, Renaissance Capital, CIT-Finance, Aton etc.)
• Leading Russian investment companies
FORTS General Clearing Members
FORTS Participants
-Leading investment companies
-Investment banks including global investment banks
-Commercial banks
-Institutional investors
-Non-residents
-Private investors
-Industry participants
In total more than 20 000 participants who are served by up to 180 professional market participants
Settlement guarantees
The funds’ amount on Sept, 2007 mln $
1. Initial margin(deposited by FORTS members and their clients) 460
2. Guarantee Funds: 36 2.1. Contingency Fund (made of equal contributions of FORTS members) 18 2.2. Reserve Fund (formed from RTS Clearing House own balance sheet) 18
A separate specialized clearing company – RTS Clearing House: acts as a central counterparty to the futures and options transactions runs the settlement of all the contracts
Three-level guarantee system:• Initial margin (guarantee payment)• Reserve Fund• Contingency Fund
RTS Derivatives Department
Tel/Fax: 007 495 705 90 31
E-mail: [email protected]
Web: www.rts.ru or www.forts.ru
Contact details:
