While acknowledging financial market improvements, the paper also highlights problems stocked up over the years. Many experts think those problems will brake in further economic investment increase by the Russian finance sector. More than that, they threaten to send the national capital market into collapse.
As the Federal Finance Market Service points out, investors do not regard the national finance market as a way to attract investment resources. Resident companies draw their investments mainly from their own money or from loans, or again, from overseas finance market IPOs-initial public offerings.
Liquidity shortage in quality assets and long-term investors' inadequate demands make the market extremely unstable, says the paper.
In that, a considerable share of transactions involving Russian assets are made outside Russia. A greater part of free-circulation stock thus leaves the country, while government bodies' resolutions have ousted long-term investment resources of the newly established compulsory accumulation systems from the market.
Among the many reasons for the available problems, the Federal Finance Market Service points out technological, behavioral and regulative.
First, the finance market is lagging behind national infrastructure progress. Nonresident investors still view the Russian stock market as an offshore arrangement with a non-standard clearing settlement system and unreliable patterns of accounting securities ownership.
Second come behavioral factors. It is easier for transnational banks to place stock in London or New York City, where banking and investment experts concentrate, and where legal and financial arrangements of transactions and their organization all run on smooth and well-tried patterns, the paper goes on.
A ban on compulsory accumulation systems' finance turnover in the domestic finance market is robbing that market of long-term moneys, while business globalization by industrial-financial mammoths goes hand in hand with national capital outflow and an encouraged overseas capital inflow to investment projects.
Last but not least, Russian trading systems are unable to make IPO up to world standards.
The Russian finance market has not yet finished the establishment of effective legislative arrangements that would allow finance companies to adequately protect investors' and clients' rights, and offer guarantees against excessive obstacles to capital as it emerges in the domestic market, say Federal Finance Market Service experts.
