STOCK EXCHANGES

Stock market exchanges are a real or virtual location for the sale and purchase of private equities. A way for private enterprises to raise investment funds.

The first stock market exchange in post-Soviet Russia was primarily trade in privatization vouchers. As privatization proceeded apace, so did the volume of transactions on Russian exchanges. Shares

in certain Russian enterprises, particularly those of oil and gas companies, were also increasingly offered on the market, but the stock market or markets in Russia have yet to offer enterprises significant sources of either domestic or foreign investment funds.

Initially, the Russian stock exchanges were wild and risky places to venture funds. The early days witnessed two major boom and bust cycles: 1994–96 and 1996–98. Following the financial crisis of 1989, the Russian stock market almost ceased to exist. The Russian government sought to regulate the market step by step. Prior to 1996 enterprises were not required by law to maintain independent, public registries of stock outstanding, and both domestic and foreign investors learned to their dismay that they could be defrauded of their equity claims. The 1996 Russian Federal Securities Act required public registries and created the Federal Securities Commission and charged it with coordinating the various federal agencies that were responsible for governing the securities market. Conditions have improved for investors, but much remains to be done to create a reasonable market in equities comparable with those in more advanced capitalist countries. It remains more a site for speculation than for raising significant amounts of investment funds.

See also: economy, post-soviet

bibliography

Gregory, Paul R., and Stuart, Robert C. (2001). Russian and Soviet Economic Performance and Structure, 7th ed. New York: Addison Wesley.

Gustavson, Thane. (1999). Capitalism Russian-Style. New York: Cambridge University Press.

James R. Millar