Number of individual investment accounts exceeds 1.6 million

Only in 2019 Q4, the number of individual investment accounts (IIAs) rose by 467,000 (39.8%) exceeding 1.6 million as of year-end. These movements are confirmed by the Bank of Russia’s statistical data on the operations of certain types of professional participants of the securities market in 2019 Q4. IIAs mainly attract investors with tax allowances.

Brokerage accounts account for the bulk of IIAs: more than 1.4 million units. The Bank of Russia notes that the entry threshold for the sector has lowered recently and customers open accounts with little investment to try investing in the equity market. Thus, in accordance with the Bank of Russia’s data, in 2019 Q4, the size of the average IIA brokerage account fell to 92,000 rubles, while IIAs under trust management totalled 301,000 rubles.

The total market value of securities in custody accounts with depositories rose in 2019 Q4 by 4.3 trillion rubles, coming in at 67.7 trillion rubles. Despite the fact that the bulk of securities in depositories are debt instruments, which account for 54% of the total value of recorded securities, the largest increase in value was registered in shares, due to the rising prices in the Russian equity market (+2.3 trillion rubles or 8.6%). That said, following the appreciation of the ruble, the ruble value of foreign securities decreased by 0.5 trillion rubles (-5.3%), totalling 8.1 trillion rubles.

In Q4, the number of professional participants continued to contract, falling by 2.8% to 484. The main reasons for leaving the market are the application by the Bank of Russia of supervisory measures for repeated violation of securities laws (56% in 2019 Q4) and voluntary licence cancellations (44%) on the back of higher competition with large professional participants.

12 February 2020

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