S&P Expands Global Index Offering with Addition of Russia's Flagship RTS Index
26.01.06 18:58
/Standard & Poor's, London, January 26, 06/ - Under an agreement signed
today with the Russian Trading System Stock Exchange (RTS), Standard &
Poor's, the leading provider of independent investment research, ratings and
indices, is adding the RTS Index (RTSI), the leading Russian equity
benchmark for international and domestic investors, to its global index
portfolio. RTS grants to Standard & Poor's exclusive rights for distributing,
providing, licensing, marketing and publicizing the RTS Indices.
Under the agreement, Standard & Poor's has assumed commercial
management for licensing the RTSI to investment managers, trading desks
and product structurers for the creation of financial products. Standard &
Poor's also immediately joins the RTS Information Committee which
performs general control and amends the existing methodology of the RTS
Index. Standard & Poor's representative becomes a permanent member in
an advisory capacity to provide international market feedback on Russian
index governance. The business arrangement is expected to entail co-
branding and expansion of RTS's family of tradable and benchmark indices.
This will enhance their appeal as portfolio management tools for global
investors and will further pave the way for development of index-linked
vehicles and listed index derivatives.
Over the last 12 months the existing headline RTS Index more than doubled
in value - from 600 points to 1300 points. It currently captures more than
USD 300 billion, about 80 percent, of the Russian stock market
capitalization, excluding Gazprom shares (which before the beginning of
2006 traded exclusively on the St Petersburg Stock Exchange). The latter
are expected to be added to RTSI soon, which will increase its coverage to
about USD 490 billion, 85% of the market capitalization.
Cross-border investment into Russia more than doubled between 2002 and
2004, and there was a net inflow of capital to Russia at the end of 2005,
fuelling demand for transparent and rigorous benchmarks that not only
capture the uniqueness of Russian equities but also faithfully measure the
market's performance. Standard & Poor's is the world leader for domestic
headline indices through its local exchange partnerships, and RTS is the
logical extension to Standard & Poor's existing network of 12 exchange
partnerships in key geographies. In pursuing this commitment to the
emerging markets, Standard & Poor's is responding to international investors
seeking high growth areas and new strategy plays by capturing another vital
component of the increasingly important BRIC economies (Brazil, Russia,
India & China).
Robert Shakotko, Managing Director of Standard & Poor's Index Services,
said, "Standard & Poor's strategy is to bring global index standards to local
markets. Our clients have expressed a growing interest in products linked to
Russian equities. We are therefore pleased to offer the RTS index, already
the recognised brand among Russian indices, as part of S&P's global
licensing program."
Oleg Safonov, president of RTS, stated, "RTS sees multiple benefits in
delegating commercial management to Standard & Poor's - both short and
long-term. This will position RTS as the premier player for investing in the
listed Russian economy through recognition of the S&P brand and its
standards of quality. RTS benefits from instant commercial exposure to the
world's largest existing index licensing network, as well as a valuable source
of expert advice on index business development and management issues.
For the Russian equity market, this means higher volumes and trading
liquidity due to a certain internationalization of market participants who
access the underlying stocks."
Primary Credit Analyst:
Jason Feldmayer, London, (44) 20 71 76 84 74
Jason_feldmayer@standardandpoors.com
[2006-01-26]