Stock market expands thanks to mass investors

In 2019 Q1, professional securities market participants continued to expand their customer bases. The number of brokerage customers hit 2.5 million individuals (a 65% year-on-year increase), while the number of deposit customers totalled 3.27 million individuals (a 74% increase), according to the Review of Key Indicators of Professional Securities Market Participants.

The growth was encouraged by new investors from the mass segment. Credit institutions with professional securities market participant licences attract more investors from this segment due to their wide branch networks and recognisable brands.

The Review describes behavioural models and notes that more long-term investors in the brokerage market prefer passive investing, while short-term transactions are becoming less popular. A continuous inflow of new clients that open individual investment accounts (IIAs) promotes longer duration of investments.

During the first quarter the number of IIAs grew by 21%, totalling 722 thousand with assets reaching 108.6 billion rubles. An average amount in IIAs maintained by brokers dropped from 127 thousand to 117 thousand rubles, while average accounts under trust management shrank from 408 thousand to 373 thousand rubles.

Assets deposited in IIAs are mostly invested in low-risk fixed income securities, mainly sovereign and municipal bonds, as well as in first-tier corporate bonds.