The stock exchange market is one of the key mechanisms for attracting monetary ressources for investment, economy modernisation and stimulation of the production growth in a country. At the same time the world stock exchange markets can be a source of financial instability and even of macroeconomic and social shocks. Esspecialy volatible to economic shocks are the stock exchanges of transitional economies, such as Russia, which was characterised as a one of the most risky countries in early 90 ies. The transition of Russia from a plan to a market economy has caused increasing interest to stock exchanges as an important component of the stock market. Russian economists came to conclusion that stock exchange market is the nervous terminations of economy and of all spheres of the life of society. These nervous terminations react to the depth of the processes occuring in an organism, much earlier, than the organism itself. Therefore the stock exchange market is the lead indicator of what will occur in economy. But imperfection of the Russian legislation, absence of culture of corporate management, lacks in system of disclosing information and legal base demanding completion are the basic features of the exchange stock market in Russia. The purpose of my assigment, therefore, is to analyse the current competitive position of Russia on the world stock market, to reveal problems of modern Russian stock exchanges and to find out the reasons of their occurrence. The efficiency of the stock exchange in Russia will be assessed according to the models applied in the financial literature. In order to reach this target first we have to look at the theoretical aspects of the core essence and main functions of stock exchanges.
Table of Contents
1 INTRODUCTION
2 STOCK EXCHANGE MARKET- THEORETICAL ASPECT
2.2 Economic functions of stock exchanges
2.3 The role of stock exchanges in transitional countries
2.4 The assessment of economic efficiency of stock exchange
3 ASSESSMENT OF STOCK EXCHANGE MARKET IN RUSSIA
3.1 Origin and development of stock exchange in Russia
3.2 The competitive position of the Russian stock exchange market
3.3 Risks factors in Russia
3.4 Main features of the stock exchanges in Russia
3.5 Exogen factors, influencing stock exchange market in Russia
3.6 Endogen factors, influencing stock exchange market in Russia
4 ASSESSMENT OF EFFICIENCY OF STOCK EXCHANGE IN RUSSIA
5 CONCLUSION
Research Objectives and Topics
The primary objective of this assignment is to conduct a comprehensive analysis of the current competitive position of the Russian stock exchange market within the global landscape. Furthermore, the paper aims to identify the core challenges facing modern Russian stock exchanges and determine the underlying reasons for these market obstacles, utilizing established financial models to assess economic efficiency.
- The theoretical foundation and essential functions of stock exchanges in modern economies.
- The historical development and specific structural characteristics of the Russian stock exchange market.
- Evaluation of risk factors, including political, liquidity, and country-specific risks impacting the Russian market.
- Assessment of institutional, exogen, and endogen factors influencing market development and competitiveness.
- Comparison of Russian economic indicators with other transitional economies to contextualize its global standing.
Excerpt from the Book
3.1 Origin and development of stock exchange in Russia
The history of stock exchange markets in Western Europe and the USA has begann more than three hundreds years ago. The Russian organised stock exchange markets on the contrary exists more than 10 years.
The renascence of stock exchanges in Russia was prepared by the system of securities trade of production ressources in 1988-1989 years. With the advent of barter transactions and due to a big amount of production in stock, companies were interested in stock exchanges as a opportunity to sell their products to the market prices. Another reason was the deficit character of the Soviet economy, i.e. that the monetary demand exceeded the supply in form of consume goods. That is why the appearance of stock exchanges in Russia was seen as an opprotunity to invest surplus funds. One of the features of the Russian stock exchanges is the unique character, i.e on the same stock exchange you could do both goods and stock operations.
Development stages of the Russian stock exchange market:
1990-1992
This period is marked by the development of the primary legislation basis and grounding of first public coorporations. In the year 1990 the Moscow commodity exchange was registered and after one year the number of stock exchanges reached nearly 200 units.
1992-1995
Privatisations of vouchers and development of organised state stock exchange market. In the year 1994 the securities market in Russia beginngs to exert influence on the economic and political development of the country. It contributes to the reduction of inflation rate as well as to the solution of crisis of non-payments. This period is characterised by the first FDIs in the stock of privatised Russian companies.
Summary of Chapters
1 INTRODUCTION: This chapter introduces the stock exchange as a vital mechanism for economic growth while acknowledging the risks inherent in transitional economies like Russia, setting the goal to analyze the current competitive position and efficiency of Russian stock markets.
2 STOCK EXCHANGE MARKET- THEORETICAL ASPECT: This section defines the core essence of stock exchanges, their economic functions, and their specific role in countries transitioning from planned to market economies, while establishing criteria for assessing organizational efficiency.
3 ASSESSMENT OF STOCK EXCHANGE MARKET IN RUSSIA: This chapter provides a detailed analysis of the evolution, risk factors, and unique features of the Russian market, including an exploration of both exogenous and endogenous factors that shape its current state.
4 ASSESSMENT OF EFFICIENCY OF STOCK EXCHANGE IN RUSSIA: This part evaluates the market performance using metrics like the RTS index and capitalization level, ultimately concluding that the Russian market still struggles with issues that prevent it from being defined as fully efficient.
5 CONCLUSION: The final chapter summarizes the market's "provincial" status relative to its economic potential, highlighting the paradox of its current structure and the necessity for balancing global integration with domestic reform.
Keywords
Russian stock exchange market, transitional economy, RTS index, market capitalization, financial efficiency, foreign direct investment, institutional factors, stock liquidity, economic transition, risk factors, blue chips, corporate governance, market infrastructure.
Frequently Asked Questions
What is the core focus of this research paper?
The paper examines the Russian stock exchange market, specifically analyzing its development, competitive standing, and overall efficiency within the context of the country's transition to a market economy.
What are the central themes discussed in this assignment?
Key themes include the theoretical functions of stock exchanges, historical development of Russian trading systems, risk assessment, market transparency, and the influence of both external and internal factors on future growth.
What is the primary objective or research question?
The research aims to analyze Russia's current competitive position in the global stock market, reveal the problems hindering modern Russian exchanges, and assess their efficiency using standardized qualitative models.
Which scientific methodology is applied in this study?
The author uses a qualitative research approach, applying a criteria catalog developed by Rudolph and Röhrl to evaluate the organizational and economic efficiency of the Russian stock exchange market.
What topics are covered in the main section of the book?
The main section covers the theoretical framework, the evolution of Russian exchanges, the identification of primary and secondary market risks, and an analysis of structural features like market concentration and fragmentation.
Which keywords best characterize this work?
Essential keywords include Russian stock exchange, transitional economy, market capitalization, stock liquidity, and corporate governance.
How does the Russian stock market's dependence on "blue chips" affect its stability?
The market is highly concentrated in a few large companies, particularly in the oil and gas sector, which makes the index significantly more volatile and susceptible to external demand shocks.
Why does the author describe the Russian stock exchange as "provincial"?
The author uses this term because, despite Russia's substantial GDP and economic potential, the size and capitalization of its stock market rank far lower globally, indicating a lack of alignment between its financial and real economy sectors.
- Quote paper
- Dipl. Betriebswirtin Svetlana Shirobakina (Author), 2006, The analysis of the stock exchange market in Russia, Munich, GRIN Verlag, https://www.grin.com/document/57862
