Reddit Revolt Makes Saint Petersburg Bourse Russia’s Busiest

Written by
Anna Baraulina
Written by

Anna Baraulina

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(Bloomberg) -- A stock exchange founded in Russian President Vladimir Putin's hometown just became the busiest venue for equity trading in the country thanks in part to last week's retail-trader frenzy in the U.S.

Stock volumes on the Saint Petersburg Exchange -- which lets investors buy and sell foreign shares directly via their Russian brokerage accounts -- surpassed those of the Moscow Exchange for the first time on record last month. Trading on the SPB, as it's known, climbed 14% in January to $36.1 billion. The Moscow Exchange, which focuses on Russian securities, saw the equivalent of $30.2 billion change hands.

SPB, which moved its offices to Moscow in 2012, doesn't offer shares of GameStop Corp., whose stock soared 1,625% in January as retail traders marshaled on Reddit forums and trading apps to drive out short-selling Wall Street hedge funds.

But other targets, like Bed Bath & Beyond Inc. and American Airlines Group Inc., are available and turnover in those stocks spiked in the last week of January. That lifted monthly volumes by several percentage points and helped SPB take the lead, according to Pavel Pakhomov, head of the exchange's analytical division.

“GameStoppers were responsible,” Pakhomov said. “Trading in these securities and the destabilization of the market led to greater client activity overall, across the entire spectrum of securities.”

Trading Lockdown

Like day traders all around the globe, Russians have turned to online brokerages as a way to offset low deposit rates, supplement their incomes amid the pandemic, and alleviate lockdown tedium.

One of the most popular mobile trading apps in Russia -- Tinkoff Investments -- is owned by online lender, TCS Group Holding Plc, which allows clients to trade the more than 1,500 overseas securities listed on SPB. The number of active daily users of the app surged threefold since the end of March -- the month Russia went into lockdown -- and stood at 700,000 at the end of January.

Day traders are attracted by the range of equities available on SPB compared with the comparatively limited selection of local stocks, according to Dmitriy Panchenko, head of investment business at TCS.

“You'll find a whole lot more stories with strong movements in 1,500 mega-liquid shares than you will looking at a dozen Russian ones,” Panchenko said.