53rd Congress of the European Regional Science Association: "Regional Integration: Europe, the Mediterranean and the World Economy", 27-31 August 2013, Palermo, Italy
The Russian securities market is the largest in CIS. What are its prospects in the context of regional development? According to World Economic Forum, Russia ranked 39th among the most developed financial systems in 2012. Weak competitive positions of the Russian financial sector are mainly related to its poor institutional climate. The most significant positive changes were noted in the securities market. However, many competitive disadvantages of the Russian securities market still exist: high dependence on foreign investment portfolio, strong correlation with oil prices and analogue markets, extreme risks and profitability, weak market of derivatives. We must also point out the negative features of corporate segment. There is an extra high concentration and subordinate role of the equity market. Despite the fact that Russia is among the top ten in the world by the volume of its exchange bond market, its corporate bond market is underdeveloped. And the main thing: our largest issuer companies turn to national securities market according to a residual principle, with medium and low capitalization companies prevailing. The post-crisis period (until 2015) is expected to be marked with a recreation of a speculative market model. However, the process of its development and performance parameters normalization will continue, accompanied by a faster growth of liquidity, diversification of institutions and instruments. As a result, the Russian securities market will be able to claim a significant role in regional development. Alongside with that, its peripheral importance seems to remain intact, and in the short term it will hardly to be able to compete with developed securities markets. So, we are only talking about a gradual approach of the Russian securities market to the average level of competitiveness in emerging markets, which manifests itself in its quantitative parameters. Hence, the prospects for its development should be considered, above all, not in the international, but in regional context. At the same time, as numerous empirical studies show, the development of the financial sector is a key driver of economic growth. Thus, an effective strategy for the development of the Russian securities market is one of the pre-conditions for sustainable economic growth of the CIS countries.
securities market emerging markets regional development