Two Russian Stock Exchanges: Analysis of Relationships

Development of Russian financial markets is gradually becoming a subject for standard economic analysis. Accumulated statistics make it possible to pose some questions about features of development and operation of financial markets in Russia. This paper analyses relationships between the two leading Moscow stock exchanges, as well as analysing performance of their indices and trading volumes, and factors determining index changes. The authors are far from thinking that their work is comprehensive or gives final answers to the questions posed. On the contrary, the authors hope that the paper will be a starting point for development of a fruitful scientific discussion of the issues concerned. Russian stock exchanges, their trading volumes and share prices, offer material which makes it possible to search for clear and steady patterns of performance. Although the period of organised stock trading in Russia is quite short, the combined use of monthly, daily and hourly observations allows a variety of questions to be posed. For example, what is the relationship between the performance of the two exchanges as regards indices and trading volumes, and how are those related to international indices and important factors traditionally affecting levels of market activity, such as economic activity in Russia, commodity prices, etc.? One interesting aspect of stock index performance is the slow rate of index growth despite the relatively long-lasting economic recovery (Figure1).