10 Years of Growth: Anniversary of the MICEX Index
OREANDA-NEWS. Over 10 years since its launch on September 22, 1997 the MICEX Index has grown from 100 to 1725.11 points (21.09.2007) and has earned the reputation of the transparent and effective financial indicator of the Russian stock market, MICEX press service's review reads. It is used to evaluate the market situation and as is a base for index funds and futures contracts,
Over the last 10 years the MICEX Index has become a modern financial indicator which fully satisfies international investment standards. The MICEX Index is calculated with frequency exceeding several values a second and is the only online index on the Russian market The MICEX Index is calculated in rubles, which makes it independent of changes in exchange rates and enables to reflect the true state of the market. The system of index management secures the transparency of the formation of the calculation base (component stocks) of the Index. The Index Committee of the MICEX Stock Exchange is comprised of leading analysts of the Russian financial market and members of the professional community, which guarantees the representativeness of the Index.
At present, the share market of the MICEX Stock Exchange is growing rapidly. The MICEX SE holds leadership positions among Russian and international trading floors by the volume of trading in Russian securities. The MICEX SE accounts for 98% of the total volume of trading in securities on Russian exchanges and about 73% of the total volume of trading in Russian securities on Russian and foreign exchanges. In the first 8 months of 2007, the total volume of trading on the MICEX SE amounted to 26 trillion rubles (about 1.02 trillion US dollars). This exceeds more than two times the volume of trading in securities reached in the same period of 2006.
Today, the MICEX Index is comprised of 30 securities of issuers representing the main sectors of the Russian economy. The share of turnover of the securities comprising the MICEX Index in the total turnover of the share market on the Stock MICEX Exchange exceeds 98%. The сapitalization of the securities comprising the MICEX Index is over 19.5 trillion rubles (767 billion US dollars) or 80% of the capitalization of Russia’s exchange-based share market. Today, shares in LUKoil, Gazprom, Sberbank, Norilsk Nickel, Surgutneftegaz, RAO UES and Rosneft have the largest weight in the MICEX Index. In 2007, of all securities comprising the MICEX Index, common shares in AvtoVAZ (+124.8%), Severstal (+55.4%) and Norilsk Nickel (+48.9%) demonstrated the most rapid growth.
The historical maximum value of the MICEX Index at the close (1807.28 points) was recorded on 23 July 2007. The minimum value of the MICEX Index was 18.53 points (on 5 October 1998). The maximum value of the Index reached in the course of trading (1817.58 points) was recorded on 20 July 2007. In recent years the MICEX Index has demonstrated high growth rates, although the current year has not been very favorable for investors. In 2006, the MICEX Index grew by 68% against 83% in 2005. In 2007 the MICEX Index has grown by only 2.2% over the beginning of the year, which reflects the deterioration of the situation on the world stock market, caused mainly by the crisis of the US market for mortgage loans. At the same time, over the last ten years, the MICEX Index has shown higher growth rates than similar indicators of all developed stock markets and most emerging markets. By the rate of growth the MICEX Index ranks 6th among national stock indices of 50 largest stock markets, yielding to the Chinese SSE Composite Index, the Austrian ATX, the Mexican BOLSA, the Czech PX and the Saudi Tadawul Index, which reflects the general trend of the Russian stock market.
The MICEX Index was the first Russian index used as a basis for the first index fund. At present the MICEX Index is used by managing companies as an underlying asset for 28 index funds. Their total value of assets is 5.5 billion rubles (USD217 billion ). Since December 2005, the net asset value of index funds based on the MICEX Index has grown by over 600% as a result of an increase of the number of funds and shareholders preferring to invest in funds based on the MICEX Index.
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