Speculators on the Moscow Exchange sharply intensified the acceleration of third-tier shares

There has been a marked rise in the number of attempts to boost share prices on the Moscow Exchange.

Speculators use securities from the third echelon, which are low in liquidity, to increase their profits quickly.

The Moscow Exchange and the Bank of Russia are collaborating in an effort to curtail these practices.

In the third quarter of 2023, the Moscow Exchange reported 63 instances of stock prices increasing rapidly, according to a representative from the RBC platform. This is a significant increase from the 13 such episodes recorded throughout the entirety of the previous year.

Boris Blokhin, director of the Moscow Exchange stock market department, explained that the rise in the number of cases is due, in part, to the stricter criteria for determining instances of destabilization in order to quickly respond to abnormal price movements.

The Bank of Russia has reported a rise in the amount of stock dispersal in the second and third quarters of 2020. This was mainly seen in illiquid third-tier stocks, which may have a low free-float and lack of market makers, and was characterized by non-market pricing of individual shares.

A representative of the Central Bank noted that some investors, who view the third-tier stock market as a way to make quick money, are more susceptible to external influences.

Individuals who are more likely to make decisions based on emotion and be influenced by bad investment advice now dominate the market.

The shares of the United Carriage Company (UWC) have recently experienced an acceleration in the third echelon. In early September, the price of these securities had risen to nearly 300 rubles, however, by mid-October the quotes had dropped to 77.6 rubles.

BCS reported that in July, there were 41 cases of stock quotes increasing by 15% or more in a single day, and in August, this number had risen to 163.

Ilya Khersontsev, head of the Association of Retail Investors (ARI), has emphasized the need to increase accountability for insider trading and market manipulation, including through social media.

A representative of the Moscow Exchange stated that they are in constant dialogue with the Central Bank and market participants to refine existing measures and introduce new ones to prevent destabilization.

The maximum deviation of the prices of applications submitted by market participants for the purchase of shares and depositary receipts of Russian issuers included in the third level of listing is limited to 22% of the closing price of the previous trading day, starting from September 21.

In October, the number of cases of price destabilization was reduced due to the implementation of a new mechanism. Starting from October 30, the Moscow Exchange will be altering the way discrete auctions are conducted.