Definition and composition of the MICEX index

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Many have heard this combination of letters more than once. On our planet, there are many indices of world financial exchanges, in Russia there is also 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 environment. But despite this, the market is growing and strengthening, and soon it will be on par with world indices.

Definition

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 Moscow Exchange 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 rates.

This index reflects the current situation in the Russian financial market, 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 50leading Russian companies. When it was created, it was equal to 100 points, but in the same year it increased 3 times.

Views

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", and they are most often traded by speculators or traders. The method of calculating the index itself is the same, but it is still more complex and detailed. In our time of technology, you do not need to calculate the index yourself, you just need to find it on the Internet, where it is calculated by a computer with an interval of 15 seconds, that is, it is almost always up to date. It can also be divided into industries, depending on the interest of the trader.

Composition of the MICEX index

If divided by sectors, the index contains:

• 13 major companies in the fuel sector;
• 23 electrical companies;
• 5 telecom and internet companies;
• 21 steel company;
• 10 financial companies;
• 9 retailers;
• 5 pharmaceutical companies;
• 4 transport service firms.

It is also worth noting that 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 sharesThe MICEX index is reviewed 4 times a year.

MICEX features

From the peculiarities of the Russian market, one can single out its high speculativeness due to the small intervention of state regulators. Also, investing in an index may only bear fruit after many years, but even this return is not guaranteed. This is due to the fact that most of the companies in the 2018 MICEX index have already reached their potential and are developing slowly.

In order to earn a large amount on the market, you need to invest in startups that are not in the top 50. Previously, MICEX and RTS were completely different, but now the indices are very similar in their calculation method, the only difference is in the original currency calculation. Most often, the number of points itself 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 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 have an impact, although to a lesser extent than the economic situation.
• Technical progress. A very important factor in today's world. It is innovation that can greatly advance an industry or a company and also strongly push back competitors.
• Environmental situation. An important factor for commodity companies. A ban on mining in certain regions, depletion of the land or harm to the planet can have a strong impact on a company's performance.
• The public. Various news, strikes, protests and other social events also have an impact on the index.

The benefits of the index

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 asset. Another important indicator is the volume of transactions. Large volume means interest in the market at a given time, which means more volatility. This situation is very attractive for speculators. For the state, the index can also be useful. Thanks to the index, a possible crisis can be tracked in a timely manner. To do this, record low indicators are monitored and, when they are reached, measures are taken to improve the market.