Many have heard this combination of letters more than once. There are many indexes of world financial exchanges on our planet, in Russia there is such an index, it is called the MICEX. The Russian market is still very young, so few investors risk investing in it, especially given the political situation. But, despite this, the market is growing and strengthening, and soon it will become one level with world indices.
Definition
The MICEX is an important economic indicator, which consists of a set of securities indices that are part of the MICEX index. The abbreviation stands for "Moscow Interbank Currency Exchange." Sometimes this indicator is called the MosBirzhi index. It should be noted that the value of shares can be expressed in any currency, but the index itself is always expressed in points. This is done so that there is no confusion when converting and different courses.
It is this index that reflects the current situation in the financial market of Russia, which allows you to correctly determine the level of risk for mutual funds and other brokerage services. The index was created in 1995 and includes 50 leading Russian companies. When it was created, it was equal to 100 points, but in the same year it grew 3 times.
Kinds
As noted above, the index includes 50 leading companies, but there is also the MICEX-10 index, which includes 10 leading companies. They are also called "blue chips", they are most often traded by speculators or traders. The method of calculating the index itself is the same, but still it is more complex and detailed. Nowadays, technology does not need to read the index itself, just find it on the Internet, where it is read by a computer with an interval of 15 seconds, that is, it is almost always relevant. It can also be divided by industry, depending on the interest of the trader.
The composition of the MICEX index
If divided by sectors, then the index contains:
- 13 major companies in the fuel sector;
- 23 electrical companies;
- 5 companies involved in communications and the Internet;
- 21 metallurgical company;
- 10 financial companies;
- 9 retailers;
- 5 pharmaceutical companies;
- 4 companies involved in transport services.
It is also worth noting that out of all the companies there are only three permanent leaders: Lukoil, Sberbank and Gazprom. The capitalization of each of these companies is more than 1 trillion rubles, and each of them occupies a leading position in its industry. It is also worth considering that the composition of the MICEX index is reviewed 4 times a year.
MICEX Features
Among the features of the Russian market, one can single out its high speculativeness due to the small interference of state regulators. Also, investing in the index can bear fruit only after many years, but this profit is not guaranteed. This is due to the fact that most companies in the MICEX index in 2018 have already reached their potential and are developing slowly.
In order to earn a large sum of money on the market, you need to invest in startups that are not in the top 50. Previously, the MICEX and the RTS were completely different, but now the indices are very similar in their calculation method, the difference is only in the original calculation currency. Most often, the very number of points does not matter much, the dynamics, its direction and strength are much more important.
Influence
Any trader or investor should always understand what exactly affects the index. All the companies included in the MICEX index are influenced by the following factors:
- Economic situation. Almost any event in the global economy affects the index, to a lesser or greater extent.
- The political situation within the country and in the international arena. Such changes also affect the truth to a lesser extent than the economic situation.
- Technical progress. A very important factor in the modern world. It is innovations that can greatly advance the industry or company and also strongly discourage competitors.
- Ecological situation. An important factor for commodity companies. A ban on mining in certain regions, land depletion, or harm to the planet can have a major impact on company performance.
- Public. Various news, strikes, protests and other social events also have an impact on the index.
Index Use
The MICEX index is very useful for technical analysis. Thanks to him, traders and investors can see the big picture of the market movement. Thanks to this, they can partially predict the further movement of their assets. Another important indicator is the volume of transactions. A large volume means interest in the market at a given time, which means greater volatility. This situation is very attractive to speculators. For the state, the index can also be useful. Thanks to the index, a possible crisis can be tracked in a timely manner. For this, record low indicators are tracked and, when they are achieved, measures are taken to improve the market.