A Message about Moscow from Ernest S. McCrary, Editor & Publisher – Special Projects CEO of Institutional Investor and Alexei Rybnikov of MICEX Stock Exchange.

Over the past few years even the most inattentive investors are aware that Russia’s equity and fixed-income markets have been among the best performers in a world that has been favored with many pockets of good growth. But for reasons of history, habit and plain hesitation, many investors have missed a good ride in Russia. The charts below tell the story—a delight to those who participated, and a regret to those who kept to the sidelines. Now what?

Despite risks and perceptions of risk, Russia today is a mainstream market for global investors who seek routine geographical diversification of their portfolios. The idea for this Guide arose more than a year ago in discussions between Institutional Investor magazine and MICEX Stock Exchange about Russian market information. It is apparent that investors need more and better information from within Russia to understand and participate in a market that has grown quickly—and is likely to continue on that course. Already, it is comparable to the Indian and Chinese markets in size, with far fewer listed companies. And, among The BRIC equity markets, Russia has consistently been the star performer.

In this venture, Institutional Investor is partnering with the MICEX Stock Exchange, founded 15 years ago as a currency trading platform and covering the equities market since 1997. Corporate and regional bond trading were added in 1999. Today it is the country’s dominant exchange, accounting for about 90 percent of local securities trading volumes. Average daily trading volumes have increased six-fold to $3.5 billion between 2005 and early 2007. Comparing 2006 with 2007, the share of foreign investors on MICEX has increased from 15 percent to over 25 percent of volume traded daily, with more and more institutions choosing to trade equities locally.

We trust that you will find new and useful information in this Guide, the first of its type published by Institutional Investor with a partner exchange. And we give special thanks to all the co-publishers and individuals in Russia and abroad who have generously provided their support and expertise to make this publication possible.

Click here to download this sponsored report published by Institutional Investor