Russians have opened more than 140,000 individual investment accounts (IIAs) since January 2015 after the government introduced tax incentives for individuals to invest in Russian bonds and equities. Each fully funded account is worth the equivalent of approximately USD 6,400 per year.
Via this type of account retail investors are expected to hold assets worth RUB 1 trillion (about USD 16 billion) by 2020, the equivalent of about 11% of the free float of the Russian equities market today. Yet there remains huge growth potential – just 0.7% of Russians have investment accounts, compared to 10.0% of South Koreans and 10.9% of Chinese.
As local liquidity increases, more international investors will switch to trading shares in Moscow rather than depositary receipts listed elsewhere. The retail segment may become a crucial source of long-term capital on the financial market, which will increase its depth and push up valuation multiples.
IAA Accounts Dynamics
Source: Moscow Exchange
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