Financial world rings

Stock markets

Stock market (market of securities, debentures and other paper holdings) - part of the capital market; market of securities involved in any stocks as well as over the counter (OTC Market).

Stock market is an abstract concept, served for definition of cumulative actions and mechanisms, which make securities trading possible. You should not mix this concept with stock exchange, which is organization with the following aims: providing a place for execution of trading deals and arranging together buyers and sellers of securities.

NYSE

New York Stock Exchange - the main stock exchange in USA, the largest in the world. The symbol of financial power of USA and financial industry in the whole. In New-York trading world-wide known Dow-Jones index is defined for shares of industrial companies as well as index NYSE Composite.

NYSE Composite - one of the most popular stock indexes in the world. It reflects rate changes of all shares, quoted at New-York stock exchange, including more than 1500 American largest companies with total capitalization more than 20 USD billions. That is why NYSE Composite can serve as indicator of USA economy.

The stock was founded on 17 May 1792. Since 1975 becomes non-commercial corporation, owned by 1336 members (this figure is unchanging since 1953). Places of members can be sold, the price for one place is reached 3 millions dollars.

In the beginning of May 2006 NYSE finishes merger with electronic stock Archipelago Holdings and for the first time offer shares to investors, became in this way commercial organization.

Share trading of NYSE Group is holding on stock; capitalization for beginning of March was 12,5 billion of USD. At stock it is holding operations with shares and securities of more than thousands items. Total companies' capitalization trading at NYSE was 26,5 USD trillions by the end 2006.

Working hours: 1:30 p.m. - 8:00 p.m. (Monday-Friday) GMT

2:30 p.m. - 9:00 p.m. in winter (Monday-Friday) GMT

NASDAQ

NASDAQ (abbreviation for National Association of Securities Dealers Automated Quotation) - American off-exchange market, specialized on shares of high-technology companies (electronics, software production and etc.). One of the three main USA stocks (together with NYSE and AMEX) are units of NASD, controlled by SEC. The owner of stock - American company NASDAQ OMX Group. Except NASDAQ, is owns more 8 European stocks.

At the given moment more than 3200 companies including Russian companies are trading at NASDAQ.

Regular NASDAQ trading session begins at 9:30 a.m. and ends at 4:00 p.m. (USA East coast time). Trading operations are hold on the basis of platforms SuperMontage and Primex. After regular session ends it is possible to held trading before 8:00 p.m. via platform SelectNet. Scheme according to which trading is hold at stock NASDAQ is different from traditional. Several market-makers compete for execution of clients' orders. At the given moment there are about 600 market-makers. The main function of market-maker at NASDAQ (as well as at NYSE) - uninterrupted quotations providing and sustain liquidity of certain shares group during trading. Market-maker must execute an order at his own expanse in case there is no appropriate opposite order at the market. Some market-makers support hundreds of shares, others - thousands. As a result, on average one type of shares are supported by 14 market-makers, other shares types - up to 50. NASDAQ quotations are the result of quotation correlation, provided by market-makers and alternative trading systems.

Working hours: 1:30 p.m. - 8 p.m. in summer (Monday-Friday)

2:30 p.m. - 9:00 p.m. in winter (Monday-Friday)

NYMEX

New-York Merchantile Exchange (NYSE: NMX) founded at 1872, take first place in the world on oil futures trading. Contracts for oil, gas, platinum, palladium, gold, silver, copper and aluminum are traded at this Exchange. According to the data of Futures Industry Association in the year 2006 216 billions of deals were executed. In 2006 NYMEX profit was 497,3 billion of USD, net profit 154,8 billion of USD. Capitalization - 11,4 billion of USD.

LSE

London Stock Exchange - one of the biggest and oldest European Exchange. Officially founded in 1801, however in fact its histori began in 1570, when King's financial agent and adviser Thomas Gresham built "Royal Exchange" on his own money. LSE is a joint stock company, its own shares is traded at LSE.

Working hours: 07:30 p.m. - 03:30 p.m. in summer (Monday-Friday)

08:30 p.m. - 04:30 p.m. in winter (Monday-Friday)

TSE

Tokyo Stock Exchange was founded in 1878. Tokyo Stock Exchange is unprofitable member organization. It is body corporate and has multiple rights in sphere of self-government.

Tokyo Stock Exchange accounts for 80 % of country's stock turnover. The main traders are the institutional owners of security papers. In Japan individual owners have only 20 % involved in stock market shares, and 80 % belog to the financial organizations, ensurance companies and corporations.

Placement owners do not figure on the dividends (in the beginning of 1990 they were 70 times cheaper of the market stock prize), but on the stocks' rate increasing and getting profit from selling the stocks for a higher prize (average annual profit for sold stock issued 1980 - 1994 is 34.7 %). The main trading method is open double auction. Up to 80 % of all the involved stocks in the country is selling and buying on Tokyo Stock Exchange. 1517 organizations of 1.3 - 1.5 millions incorporated concerns in Japan are registered, but they make more than 25 % of all produced goods and services.

In 2005 Tokyo Stock Exchange took the second place in world classification of the first-rate Stock Exchange all over the world. 2,5 thousands of the companies, which bring more than 3000 billion of US dollars profit.

The Vienna Stock Exchange is one of the world's oldest stock exchanges and the only trading floor in Austria. This Stock Exchange is implementing trading in shares, obligations and derivatives. It was established in 1771 by the empress Maria Teressa for trading the government obligations. It is a private company.

Volume of trades - $ 48 468 billion,

Listing - 110 companies,

Capitalization - $ 157 358 billion,

Profit - EUR 8,12 million.Work time: 07:00 - 15:30 during the summer (Monday - Friday) GMT,

08:00 - 16:30 during the winter (Monday - Friday) GMT.

The Frankfurt Stock Exchange is the largest German and one of the world's biggest stock exchanges. The operator of this trading floor is Deutsche Boerse Group AG. The starting point of the existence of this stock exchange is considered to be in 1585 - the year of acceptance of unified exchange rates by merchants in Frankfurt am Main, which has become the largest European commercial center by that time. It has been occupying the leading position in Germany since 1949. It was transferred to the control of "Deutsche Boerse Group" in 1993, created on its basis.

The main index - DAX, which reflects the share's prices of 30 major German companies and is a barometer of the German economy.

Work time: 07:00 - 15:30 during the summer (Monday - Friday) GMT

08:00 - 16:30 during the winter (Monday - Friday) GMT.

The Russian Trading System was established in the mid-1995 for the purpose of unification of regional markets into a single organized financial market in Russia. It falls under the group of the RTS.

The RTS is the generally recognized center of pricing of shares and obligations of a wide range of issuers. The information about trading on the RTS is the most important source of data about the situation of the Russian securities market, because it is this trading floor, which serves a significant part of foreign and Russian portfolio investments into shares of Russian companies.

Work time: 07:00 - 15:00 (Monday - Friday) GMT.

FOREX - abbr. of FOReign Exchange. Term FOREX is usually used for mutual designation of freely convertible currencies but not for the totality of the FX transaction. Operations on Forex by objectives market can be trading, spekulative, hedging, regulating (excange market intervention). In RuNet Forex means solely spekulative currency trading using commercial banks and dealing centers, using leverage, i.e. margin trading.

Forex is international inrebank market . Operations are carryed out via system of institutions: central banks, commercial banks, investment banks, brokers and dealing centers, retirement fund, ensurance companies, transnational companies, etc. Volume of one contract with real currency delivery at the second working day (spot market) is usually cost approximately 5 millions US dollars or its equivalent. Value of one conversion payment is from 60 till 300 US dollars. Moreover it has to spend more than 6 thousands of US dollars per month for interbank informational trading terminal. Because of such conditions convertion of small amounts. For convertion of small amounts it is better to turn to financial intermediary( bank or exchange broker), which convert for certain per cent of the amount of deal. Intermediary not always have to convert via Forex market if they have many clients and differently directed orders. But they always get commissions from their clients. For the fact that not all the clients' orders get to the Forex, intermediaries can offer lower commisions to their clients that value of direct operations on Forex. At the same time if intermediaries will be eliminated, conversion cost for the client will increase.

Current quatations are used for most per cent of operations, which not obligatory get to the Forex directly. For example changing currency rate by the state bank, which has to save currency proportions between international currencies in compliance with their proportions on Forex even if the real supply/demand in a country is not correspond with tendencies on Forex. For instance, if supply of euro is redundant on domestic market, but the price of euro/US dollar is increasing on Forex, and then central bank will has to increase the prize but not lower the prize under pressure of redundant supply.

Another striking example is marginal speculative currency trading oriented to fixation current quotations of Forex, but carrying out without real delivery. Almost all the intermediaries on currency market offer direct conversion services and speculative trading with the leverage. Generally, commissions from such operations are much lower than for direct conversion, because necessity of real contracts concluding for delivery appears seldom because of large-scale involvement and fugacity of the deals. Often such commissions assume a shape of spread - fixed difference between Bid and Ask prize at the present moment. Commonly the file of intermediaries forms between Forex and speculator and each intermediary takes its commission.

Marginal operations can lead but not necessary lead to the real demand and supply on currency market especially during the short-term period. However they cannot form common tendency of currency rates moving.

Work hours: 24-hours.

MICEX

Moscow Interbank currency Exchange is one of the large-scale universal exchange in Russia, countries of CIS (Commonwealth of Independent States) and East Europe. Established in 1992.

Stock exchange MICEX is leading Russian stock exchange where trading session for stocks and bonds of approximately 600 Russian issuers with total capitalization of almost 24 billion rubles is carrying out every day. Entry list of stock exchange trading on MICEX consist of 650 organizations which are professional market makers, whose clients are more than 490 investors.

98% of rotation of stocks trading and ADR of Russian companies on assumption of rotation on Russian exchange and approximately 70 % on assumption of world trading volume of these stock securities fall on the MICEX.

During the period from 1992 till 1998 trading of the foreign currencies on MICEX were carrying out in regime of auction. During the auction single fixed rates of ruble to US dollar and D-mark for all the traders were set up. In 1997 System of Electronic Lot Trading (SELT) was created, it was functioning simultaneously with the main trading (auction) till the crisis of 1998, and then it became the main currency trading ring of the country. At present trading through SELT are combined in the network of the single trading session by eight interbank monetary stocks. Daily trading on US Dollar, Euro, Ukraine's gryvnia, Kazakhstan Tenge, Belarussian rouble and operations with currency swap is carrying out on exchange. Total volume of the stock dealings with foreign currency is 25.9 billion of rubles and 956 million of US Dollars in 2006 (approximately the half of total stock turnover of MICEX group). At present system of risks management is created on MICEX which allows to guarantee timely discharge of obligations by all traders. One of the elements of this system is "payment against payment" principle, in compliance with it MICEX pays with trading participant only after him discharging of obligations. Members of units of currency market MICEX are 540 credit organizations.

Work time: 07:00 - 15:00 (Monday - Friday) GMT