The Ukrainian Exchange and RTS launch DMA system

Reuter
March 26, 2009
By Yuri Kulikov with Pilina Vorobjova (Moscow)

The Ukrainian Exchange, established by  Ukrainian stock market participants and RTS Stock Exchange, announced on Thursday the launch of Direct Market Access trading which in the long run will facilitate growth of  Ukrainian market liquidity by providing new opportunities to the Ukrainian market participants who are now facing hard times due to the financial turmoil.

Igor Mazepa, Head of the Exchange Committee of the Ukrainian Exchange, announced at the press conference that the launch of the order-driven trading system is "a new stage in the development of the Ukrainian stock market", which will attract to the market "hundreds of thousands of private investors".

There are 39 companies trading on the exchange. They can make trades in 70 Ukrainian company shares. By the end of 2009 the number of market participants on the Ukrainian Exchange is expected to reach one hundred, and there are plans to launch trading in futures contracts and bonds. As an RTS spokesperson informed Reuters, over this period the exchange is expecting to capture 50 per cent of the Ukranian stock market.

The system provides continuous investor access to brokerage account operations or to the required analytics via the Internet during market hours and minimizes risks for trading participants due to 100% preliminary depositing of assets and delivery on Delivery Versus Payment terms.

The Ukrainian Exchange was established in May 2008 with the participation of 21 Ukrainian companies (they hold 51% stake) and RTS Stock Exchange. Last December the exchange got a state regulator’s license to perform its business activity.

Founders of the new trading venue hope that in a few years the exchange will become the leader of the Ukrainian stock market, thus replacing the PFTS Stock Exchange (PFTS). As the financial crisis is spanning the country, daily trading volumes in this system have dropped greatly and by results of 2008 PFTS Index lost 74,3% and over 3 months of 2009 decreased by 30%.

The Ukrainian Exchange is not the only RTS’s project in CIS countries: on Monday trading opens on the Eurasian Trading System, which was established by RTS and Regional Financial Centre of Almaty City (RFCA) last December.

RTS Press Service describes ETS as a commodity exchange: the first commodity to launch will be wheat of 3rd class, but by the end of this year the exchange plans to introduce other types of cereal and metals. In 2009 the total turnover of the exchange is expected to reach $150 million.