St. Petersburg Exchange Experiences Trading Boom in 2018

The number of clients and volumes on the Saint Petersburg Exchange soared this year, helped by its service that allows investors trade in U.S. stock via the exchange, Reuters reports.

From about 7,000 at the start of 2018, the number of client accounts had reached 46,000 in early December. Turnover in November jumped to $1.1 billion from $453 million in January.

Deals on the exchange are concluded under Russian law and settled in dollars, and the bourse offers trading in U.S. stocks in the S&P 500 index. U.S. shares are held by Russia’s Settlement Depository Company and can be transferred to any depository worldwide.

Buyers of U.S. stocks on the Saint Petersburg Exchange receive dividends as other stockholders. The exchange’s bigger local rival, the Moscow Exchange (MOEX), said this year it would make a similar offering but then put off the plan. In St. Petersburg, they say this helped lift interest in its existing service.

“When the Moscow Exchange planned to launch trading in foreign securities, everyone called us,” Saint Petersburg Exchange Chairman Roman Goryunov said. “It was an excellent opportunity to talk about our already working project.”

He said demand for foreign stocks was strong. “There is a big inflow of new clients who want to buy a well-known name,” he said.

The Moscow Exchange said it was still working on plans to give clients access to U.S. stocks.

“It’s no longer a priority but we did not abandon it,” Chief Executive Alexander Afanasiev told reporters, adding that the Moscow bourse wanted to ensure it could avoid risks related to tax, legal and infrastructure issues.

The Russian central bank has said investment in foreign shares deprives the Russian economy of investment capital.