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Last Updated: Tuesday, 26 February 2008, 23:35 GMT
Russian passion for stocks and shares
By Duncan Bartlett
Business reporter, BBC News, Moscow

Micex trading floor
Micex is Russia and Eastern Europe's biggest stock exchange

Russia's enthusiasm for capitalism is evident at the thriving Micex stock exchange in the heart of Moscow.

The exchange has seen its volumes double every year since it opened in its present form in 2005, and it now trades $17bn (412bn roubles) worth of equities, bonds, derivatives and currencies every day.

But visitors to the building will not meet any excited bankers shouting and waving their hands.

Like most modern exchanges, Micex operates entirely by computer.

Planned economy

Western investors account for about 30% of Micex's trade, reflecting foreign enthusiasm for the new Russian economy.

Micex official Elena Kochetkova
I prefer not to talk about politics - Russia used to be a planned economy with no stocks
Elena Kochetkova, Micex

In 2007, foreign direct investment in Russia amounted to $52bn, or about 5% of Russia's Gross Domestic Product.

Many international banks expect that figure to rise.

Micex official Elena Kochetkova wants to encourage more foreign trade, but she admits the operation would probably shock the communists of the Soviet era.

"I prefer not to talk about politics," she says. "But as a Russian person, I appreciate my history. Russia used to be a planned economy with no stocks.

"We're glad the exchange has been successful, and within ten years we hope the wealth of our people will increase."

Soviet repression

Follow the trading day on Russia's Micex stock exchange

In the pre-Soviet era, Russia was regarded as a world leader in terms of finance.

The first mention of the construction of an exchange in Merchant's yard in Moscow dates back to 1790, and by the middle of the 19th Century there was a thriving trade.

Moscow's main stock exchange even survived the Bolshevik Revolution of 1917, although the centralised Soviet economy later choked demand for long-term credit, the lifeblood of exchange activity.

We are much closer to capitalism than we were 15 years ago
Alexei Rybnikov, Micex chief executive

But when the communist system collapsed in the early 1990s, the financial markets developed rapidly, with much less control and regulation than similar operations in the West.

Now, Micex claims its systems are in line with international standards, and it ranks as the 17th largest stock exchange in the world.

Progress

Some investors have been worried by signs of government interference in business.

The former chairman of the oil company Yukos, Mikhail Khodorkovsky, was jailed for fraud and tax evasion and his company was taken away by the state.

However, Alexei Rybnikov, the chief executive of Micex, says other business people should not be worried.

"I think it is a bit of a misunderstanding, portraying the situation as if the Russian government is reversing the privatisation trend and trying to get back state ownership in recently privatised Russian companies," he says.

"What the state is actually doing right now is putting together various state-owned assets to form state-owned holding companies which control some of the sectors of the Russian economy."

As further evidence that the government is keen to privatise some of its assets, he points out that many companies which are majority owned by the state, such as the gas giant Gazprom, have shares listed on the exchange.

Mr Rybinkov remains proud of Russia's progress.

"We have a lot of economic freedom, we have modern and well developed capital markets. We are much closer to capitalism than we were 15 years ago," he says.

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