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  Tuesday, August 16, 2022
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The Russian share market's capitalization could reach 60% of gross domestic product by 2008
The Russian share market's capitalization could reach 60% of gross domestic product by 2008, a senior official said Thursday. "We believe that 60% is quite a realistic level in 2008," said Oleg Vyugin, the head of the Federal Financial Markets Service, at a government session that discussed the medium-term strategy of the Russian financial market's development in 2006-2008. According to Vyugin, this was one of the strategy's expected quantitative indices. Vyugin said the current share market capitalization of 62.7% was attributable to the specific market situation. "Last year, the share market capitalization rose by 90% but this is temporary," he said. According to the FFMS head, such rapid capitalization growth is economically unfounded and could be dangerous. Vyugin said Russia had outstripped Italy and Germany in terms of the share market capitalization and was close to the group of countries characterized by large market volatility, for example, South Africa and Thailand, where capitalization could sometimes reach 200%. "We believe that the most important thing is to have a stable market," Vyugin said. The FFMS head also said the strategy aimed to increase the share of transactions with Russian shares on national trading floors to at least 70%. Today, the proportion of Russian stocks traded at home and abroad is 50/50, he said. The placement of shares and bonds on the domestic financial market is expected to reach at least 20% of fixed capital investment compared with the current 10-12%, Vyugin said.
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