Moscow speeds up modernization plans

The Moscow Exchange is speeding up plans to transition to a two-day settlement system as the exchange seeks to make locally traded stocks as attractive to foreign investors as listings abroad.

Russia’s main stock and fixed-income exchange will move from the current system of T+0, in which trades must be settled on execution, to a T+2 mode for all equities on Sept. 2, Chief Executive Officer Alexander Afanasiev said in an interview Tuesday.

The bourse, which raised $469 million in its Feb. 15 initial public offering, is modernizing in a bid to lure investors to Russian equities, which are the cheapest among 21 emerging markets tracked by Bloomberg.

Russian companies from OAO Gazprom to OAO Mechel list stocks in London and New York to attract foreigners deterred by the immediate settlement rule, along with regulations requiring Moscow trading accounts be set up through local custodians.

“For foreign investors this is definitely good news, because nobody keeps so much cash at the exchange,” Stanislav Kopylov, who helps manage about $3 billion at UralSib Asset Management in Moscow, said. “For foreigners it’s more convenient to first make a deal, and then settle it later.”