Stock market trading is a booming business in Russia and aside from the fact that more average Russians are realizing the benefit of trading in assets and commodities, more and more stockbrokers are beginning to start their trading businesses. Aside from the fact that more local Russians are investing in stock trading, more and more foreign investors looking to diversify their investments are also looking at Russian stock market for profitable investments.
The exposure of the Russian market to international equities will definitely add more benefit for higher returns on investment portfolios. Though the unique risks alongside political and economic circumstances in Russia must be considered when making these investments, this does not mean that the country is still not favorable for trading.
When it comes to the most dominant performers in the Russian market, it is easy to predict that the oil industry will take the lead. Russia, being one of the largest oil exporters in the world relies heavily on the proceeds from oil to sustain its economy. Presently, the top 3 dominant companies in the Russian market are in the oil sector, these are; Gazprom OAO, Rosneft oil, and Lukoil. Gazprom, being the most dominant company in the market has a market cap of $63.5 billion, while Rosneft oil and gas has a market capital of $57.76 billion, and Lukoil has a market capital of $39.24 billion.
Aside from the oil and gas industry, other industries that dominate the Russian market include; Telecoms, steel, metal, mining, and Financials. It is also important to note that there are many Russia companies that are publicly traded in other countries of the world, including the United States of America. The exchange’s trading in Russian stocks are less regulated in countries like the United States, hence the listing criteria are not as strict as what obtains in Russia, however, the risks associated with these “over the counter” stock exchanges are quite higher than the risks involved in regulated stock exchanges in Russia, hence an investor must be careful when investing in the stock of a Russian company outside of Russia.
Russia, being a leader in BRICS countries, which are the fastest developing countries in the world, deals with high risks, though the country seems to be performing much better in reducing the risks as it settles its conflicts with other world powers such as the United States. In most cases, stock markets outside of Russia that are trading in Russian companies can become over-sold, hence they may offer the perfect buying opportunity investors deserve. Russian companies offer some of the best returns in the world when it comes to stock trading, and with many prices down, this could be the perfect reason to buy many, for the purpose of selling on the long term.
Since more and more Russian brokers are entering the market, now is a good time to consider going down this route since there are many opportunities.