Russia's Stocks Surge Onto Net

By Bill Fick

Russia's capital markets have been climbing with amazing speed in recent months, drawing attention from investors worldwide and securing Russia's place as the leading -- and most lucrative -- "emerging market" on the planet. This torrential market activity both feeds upon and produces rivers of information, much of which has found its way to the Internet.

One of the most innovative on-line business services, covering 14 emerging markets worldwide from Brazil to Russia to China, is Internet Securities Inc., or ISI (http://www.securities.ru). Founded in 1994 by Gary Mueller, who had worked on Jeffrey Sachs' economic reform mission to Russia in 1990 and Polish privatization projects in 1993, ISI seeks to bring order to the chaos of emerging market information and provide a solid collection of data for finance professionals who might otherwise feel they are groping in the dark.

ISI is a premium subscription service and one of the few Internet publishing ventures that has succeeded in selling information on-line, enjoying rapid geographic expansion and growth rates of 20-30 percent per month at times.

With a goal to provide one-stop shopping for emerging market information, ISI offices in each country served seek to license news, analysis, and data from a collection of quality sources in both English and local languages. Their Russia product shows impressive depth and breadth, with full text of daily newspapers including The Moscow Times, Izvestia, and Kommersant, stock quotes and market indices from the Russian Trading System and individual investment companies, the Garant legal database, industry sector publications, company profiles, and much more.

While some of these resources are available elsewhere (for example, Garant hosts its own website at http://www.garant.ru), ISI adds unique value by collecting them in one place with archives dating back several years and keyword search capabilities in Russian or English across the entire collection of sources.

"We don't consider ourselves to have competitors", said Larissa Wagen of ISI's Moscow office. "We are primarily a research tool, whereas services such as Reuters provide real-time price information for traders."

While global breadth and local depth set ISI apart, it is not alone on the Russian web marketplace. A USAID grant to Bloomberg and Skate Press to produce a family of financial information products spawned Skate (http://www.skate.ru), a subsidiary of Independent Media, which also owns the Moscow Times, provides free access to the MT Index datafeed, detailed information on 50 selected equities, and "Corporate Action Watch" feature articles, while the Capital Markets Russia newsletter and company fact sheets are available for a fee.

A biweekly newsletter called the Russia Portfolio can also be sampled on-line and downloaded in Adobe Acrobat file format at http://world.std.com/~rusport.

Aside from paid subscription news services, several investment banks have also created web sites offering rich analytical information about Russia's capital markets free of charge. Rinaco Plus (http://www.rinaco.ru) maintains the best such site that I have seen, and includes a good history of Russian equity markets beginning with voucher privatization. In addition, you can find daily data on stock and bond markets with a detailed description of the methodology Rinaco uses to calculate its market index, equity and fixed income newsletters, sample reports from Rinaco's research department, and a complete description of its asset management services and commission schedule.

Rye, Man & Gor Securities (http://www.rmg.ru) has a modest but clearly organized site which also offers some interesting reading, including research on several companies, weekly market reviews, quotes on top equities, and an array of macroeconomic indicators such as exchange and inflation rates. Other Russian investment sites include Rating Invest (http://www.rating.com.ru), which has a "ticker" with nearly real-time data for a few securities, Sinex (http://www.sinex.ru), AK&M (http://www.akm.ru) and a commodities service called The Russian Exchange (http://www.re.ru).

Nearly all of the resources I have described so far are Moscow-based, although regional markets are starting to take off as well and Wagen of ISI reports that they are actively seeking to add regional information providers to meet the demands of their customers. Some early Internet entrants from the provinces include the Nizhny Novgorod Stock Exchange (http://www.nnfb.sci-nnov.ru) and the St. Petersburg Futures Exchange (http://www.spbfe.futures.ru).

You can also find the Russian Federal Securities Market Commission on the Internet, albeit at an address that you will never remember buried deep within the Institute of Commercial Engineering's website (http://www.fe.msk.ru/infomarket/fedcom/ewelcome.html). Even if you won't see the latest dirt on their squabble with the Central Bank here, you can read their newsletter, check records of licenses issued, and browse other official commission documents and government decrees related to the securities market.

Interestingly, I could not find any Russian investment sites oriented toward individual consumers and small investors; Rinaco proscribes a $10,000 minimum transaction with asset management portfolios beginning at $150,000.

It should be only a matter of time, however, before aspiring mutual funds wake up to the fact that Russia's several hundred thousand Internet users tend to have much higher than average disposable incomes and just might be coaxed to take money out from under their mattresses and start putting it to work, especially if they can chart the progress of their portfolios daily on-line.