Russian Trading System (RTS) isis one of the two largest exchange platforms for trading Russian securities. It was organized in 1995 as an alternative to the MICEX that already existed at that time. After almost 20 years, the RTS has transformed into a large-scale structure that not only provides access to exchange trading to private investors and professional participants in the securities market, but also provides a range of additional services, including clearing, settlement and depositary.
The concept of the RTS index
What is the RTS index?This is an indicator of the state of the Russian securities market, which is calculated on the basis of transactions with securities concluded on the RTS trading floor. Its value reflects the total market capitalization of shares that are traded on the Russian stock market. In turn, the capitalization of each individual company is the market value of one share multiplied by the total number of shares in circulation, and reflects the real market value of the company.
Индекс РТС, наряду с индексом ММВБ, является the main indicator of the state of the domestic stock market. However, after the unification of the MICEX and RTS trading platforms, the same combined stock exchange MICEX-RTS is actually engaged in the calculation of both indicators. The main difference between these two indicators is that the MICEX index is calculated in rubles, and the RTS - in dollars. Therefore, its change is influenced not only by the dynamics of prices for shares of Russian companies, but also by the change in the ruble exchange rate against the dollar. With the constant growth of the US dollar exchange rate, the RTS index shows a more positive trend compared to the MICEX index. That is, its value grows faster and decreases more slowly compared to its “competitor”.
Types of RTS indices
RTS stock indices include the wholefamily of various calculated indicators. These include the RTS Standart Index, the RTS-2 Index, the Volatility Index (RTSVX), the RTS Siberia Index (RTSSIB) and a number of industry indices.
The main index of RTS (RTSI) is calculated onbased on information on trading in stocks of the 50 largest Russian companies. These include Gazprom, Lukoil, Sberbank, Surgutneftegaz and a number of shares of other companies. To include the company's shares in the RTS index, they must meet two criteria. First, the shares must be admitted to trading on the RTS. Secondly, the company's capitalization must be at least 0.5% of the total capitalization of all shares included in the index. The list of companies is reviewed quarterly.
Calculation algorithm
Индекс RTSI рассчитывается, начиная с 1 сентября 1995 It was then that trading in securities started on the RTS trading floor. Its value is reflected in relative units. On the date of the first trading day, the RTSI index was conditionally assumed to be 100 points.
Для того чтобы понять, что такое индекс РТС, we give a conditional example of the calculation of its value. Suppose that, as of September 1, 1995, the total capitalization of companies whose shares were included in the RTSI index was $ 500,000. On the conditional date of the next calculation, it grew, say, to $ 850,000. The conditional index value in this case will be:
850,000 / 500,000 * 100 points * 1.0752559 = 183 points (1.0752559 is the correction factor used in the calculations).
In other words, the stock market capitalization increased 1.83 times.
Calculation procedure
The calculation of the RTS index is based on dataabout the prices of purchase and sale of shares included in the index. This is done every 15 seconds, that is, in real time. But for traders and stock market analysts, the most important information is the data on the value of the indices as of the opening and the close of trading, as well as the maximum and minimum values at the end of the trading session. It is these data that they use to analyze the dynamics and trends in prices of shares of Russian issuers.
Now it became clear what the RTS index is andWhat is the algorithm for calculating it? It's time to evaluate the change in its value during trading on the RTS Stock Exchange. Index values are constantly changing. This complex process is influenced by a whole range of different factors, which include the state of the global economy as a whole, the macroeconomic situation in the country, the state of a particular industry, and, of course, the state of affairs in each individual company. Russia today in the world classification refers to emerging markets. Therefore, the values of domestic stock indices are very sensitive to fluctuations in the indices of developed markets, including NASDAQ and DowJones.
RTS Index Change History
1260 points is exactly the value onToday has an RTS index. The dynamics suggests that over the past 19 years, the capitalization of the Russian stock market has grown more than 12 times. At first glance, everything looks very optimistic. But is it really?
The index reached its maximum in May2008 At that time it was 2498.10 points. However, the crisis of 2008 led to a serious decrease in the capitalization of Russian companies. As a result of this fall, the index value dropped to the level of 80 points. Despite the recovery of the Russian economy, the domestic stock market still cannot fully recover from the serious losses it has suffered. As a result, today the leading companies of the Russian economy are almost two times cheaper than in mid-2008. And this is taking into account the growth of the dollar against the ruble by more than 10 rubles. (from the level of 23-25 rubles to today's 35 rubles for one dollar).
What is the RTS index?This is a kind of litmus test of the state of the Russian stock market, and, consequently, of the economy as a whole. It is precisely on the basis of its dynamics that it can be concluded that the largest domestic companies are developing successfully. Analysis of the change in the index allows us to conclude about the current state of the securities market and is one of the main criteria for making decisions about buying or selling shares of Russian issuers.
