Private investors invested more than 264 billion rubles in the Russian stock market in June

The reasons for such growth are primarily related to the diversification of household savings. Bank deposits, as the main form of savings, have ceased to be a reliable way of preserving money. The reduction in deposit rates following the key rate cut has led to lower returns. Taking into account inflation and taxes on deposit income, they have become an unprofitable investment.

Secondly, the rise in financial literacy enables people to take a more objective approach to allocating their funds, considering the “risk–return” ratio. At present, government bonds largely meet these criteria, as their variety makes it possible to earn income and they are a more liquid instrument than deposits.

Thirdly, banks are implementing programs aimed at retaining clients by offering investments in securities either directly or through investment programs and products.

Fourthly, expanded limits under the third type of Individual Investment Accounts have become available to individuals. These combine the possibility of receiving a tax deduction with the freedom to choose assets, while the presence of the Long-Term Savings Program (LSP) encourages capital formation specifically through exchange mechanisms.

Fifthly, the simplicity and accessibility of entering the market thanks to digitalization. Currently, the process of opening an account, passing suitability tests, and purchasing assets has been fully transferred online, eliminating technical barriers to market entry.

Sixthly, many companies continue to pay high dividends, which also attracts private investors seeking substantial income. All this has led to money gradually flowing from bank deposits into the stock market, increasing the share of individuals in equity trading to 63.5%, in bonds to 12.8%, and in the derivatives market to 46.8%.

Given these factors, the upward trend in the share of investments in the stock market sector is likely to continue in the near future, despite the decline in the stock exchange index.

Author: Doctor of Economics, Professor of the Department of World Economy and World Finance at the Financial University under the Government of the Russian Federation Elena Borisovna Starodubtseva.