Assessment of the Personal Investment Capacity for Individuals in the Russian Federation

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 865-869

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

Assessment of the Personal Investment Capacity

for Individuals in the Russian Federation

Aysylu A. Akhmetgareeva , Alla A. Elakova , Alexey G. Isavnin , Ilnur I. Makhmutov ,

Ekaterina A. Khuzina²^*

Department of Management and Economic and mathematical disciplines, The University of Management TISBI, Kazan, Russia

Naberezhnye Chelny Branch of Kazan Federal University, Naberezhnye Chelny, Russia

Received: 13/09/2019

Accepted: 22/11/2019

Published: 20/12/2019

Abstract

To analyse individual and collective investments of individuals in financial markets, we evaluate the combination of the

following factors: a list of professional intermediaries working with a particular investment object or collective investment

instrument, their market position and work results, the totality of the services and products offered, investment conditions, actual

dynamics volumes of investments in a given type of asset, its profitability, as well as the dynamics of the market as a whole. The

simplest and most understandable type of financial assets available to individuals is deposits. Bank deposits are popular among

individuals; with that, there is an annual increase in demand for this type of asset. Since 2007, there has been an increase in deposits

by 16.2 trillion roubles, and in 2018 individuals increased their deposits by 3 trillion roubles; that corresponds to a growth rate of

23.5 %. According to the Agency for Deposit Insurance, in addition to the general dynamics of retail deposits, the following features

of the deposit market can be noted: deposits with a term of 1 year to 3 years occupy the largest share in the structure of household

deposits; the most popular in the structure of deposits are those with a size of over 1 million roubles, as well as from 100 to 400

thousand roubles.

Keywords: An individual, financial market, Deposit, Commercial bank, Asset, deposit, Intermediary

The amount of the minimum contribution varies, so the

Introduction

most accessible from the point of view of this indicator are

the deposits of Sberbank and the Agricultural Bank (1000

roubles and 3000 roubles, respectively), and the minimum

deposit amount of VTB 24 is 200 thousand roubles, which

makes this deposit less accessible (1). The most favourable

interest rate is presented at Gazprombank. So, when investing

The main professional intermediaries in the deposit

market are commercial banks. Table

1 shows the

classification of commercial banks in the state deposit

insurance system by the following indicators: the bank's

assets and deposits of physical persons. Thus, the following

commercial banks included in the list of the largest and most

reliable banks in Russia became the most popular for

individuals when investing in deposits: Sberbank of Russia,

VTB 24, Gazprombank, Alfa-Bank and Russian Agricultural

Bank. Next, we analyse the combination of products and

investment conditions offered by these banks. Then, in

summary table 2, a result of comparative analysis for the

conditions of the following deposits is presented:

Replenish” (Sberbank of Russia), “Accumulative” (VTB

4), “Gazprombank- Accumulative” (Gazprombank),

Premier” (Alfa-Bank), “Accumulative” (Russian

Agricultural Bank). All represented deposits are in roubles,

are replenished, and provide for the capitalization of interest.

for

6 months in the deposit named Gazprombank-

Accumulative, the interest rate will be 8.9%. Under similar

conditions, Sberbank offers 7.15%. On average, the highest

rates are presented at Gazprombank and the Russian

Agricultural Bank, and the lowest at Sberbank and VTB 24.

So, we carried out the analysis of deposits for individuals

of the largest and most reliable banks in Russia. In addition to

these banks, individuals can choose other intermediaries with

more attractive interest rates (2). For example, with a

minimum replenished deposit of 1000 roubles and a term of 1

year, everyone can get 10.8% per annum when opening the

“

Profitable Year Online” deposit at Home Credit Bank, or

.75% when investing from 10 000 roubles in the

Perspective (monthly)” proposed by the Union Bank.

Corresponding

Author:

Ekaterina

Khuzina,

Naberezhnye Chelny Branch of Kazan Federal University,

Naberezhnye Chelny, Russia. E-mail: Eka5551@rambler.ru.

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 865-869

Table 1: Classification of commercial banks by assets and deposits of individuals as of December 31, 2018

Bank place in terms

of “Deposits”

indicator

Deposits of individuals,

thousand roubles

Place of the Bank by

the “Assets” indicator

Bank's name

Assets, thousand roubles

Sberbank of Russia

Gazprombank

FC Otkrytie

22433146804

4984239100

2813360795

2873642255

9770509810

534504255

237153223

1845208861

VTB 24

Russian Agricultural Bank

Alfa Bank

2551779006

2166341765

442841579

568587584

Bank of Moscow

Promsvyazbank

Raiffeisenbank

Binbank

1753618069

1221401758

874085221

756341388

370992025

242517817

322255770

290686863

Table 2: Terms of deposits for individuals in banks of Russia

Sberbank of

Russia

Deposit Terms

VTB 24

200,000

Gazprombank

15,000

Alfa Bank

10,000

Russian Agricultural Bank

Minimum

1000

3000

payment, roubles

Interest

rate, %:

months

year

6.85

7.15

6.90

6.85

4.85

7.75

7.65

6.25

6.15

6.90

8.90

8.20

7.60

6.10

7.60

6.90

7.20

7.95

8.30

8.10

.5 years

years

6.75

6.05

6.90

7.95

The return on investment in gold is determined by the

Methods

difference between the purchase price and the sale price of

gold. Since 2015, there has been a sharp increase and

instability of the market due to the general economic

situation in the world, but it can be noted that in the long run

the gold market is characterized by an upward trend.

Therefore, investments in gold should be considered from the

perspective of a long-term investment, although this does not

exclude the fact that an individual can earn in the short term

by speculation.

The change in profitability cannot be called stable and

predictable since it depends on many external factors. For

example, the yield for 5 years (from 2009-2014), taking into

account cumulative inflation, was -12.57%, and for 6 years

The method of analysis and synthesis of data is used to

study socio-economic phenomena, both in parts and in

general. The paper also uses the modelling method.

Results and Discussions

Next, we turn to the consideration of such an investment

opportunity available to individuals as investments in

precious metals. The most optimal way to obtain investment

income is to open anonymised metal accounts that do not

provide for the actual acquisition of metal in tangible form.

Historically, gold is considered the most popular among

investment metals, since it tracks actual global inflation and

represents a stable and reliable investment option.

Opening a depersonalized metal account is possible in

any of the largest Russian banks under the same conditions.

As a rule, banks do not charge fees for opening and

maintaining an account, however, earning on the difference

in the quotes for buying and selling the asset. Since funds on

depersonalized accounts are not included in the state deposit

insurance system, the only criterion for choosing an

intermediary is its reliability and financial stability.

(

from 2009-2015) - 33.65%, which is caused by a sharp

increase in the price of gold for 2014. In general, excluding

inflation, the return on investment in gold on average

exceeds the profitability of bank deposits, but these

investments are associated with great risks. Investing in gold

remains one of the ways to preserve capital or generate

income in the long term (3).

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 865-869

More profitable, but at the same time associated with

greater risks, are investments in the stock market. An

individual can independently send their own funds to

purchase such securities as stocks, bonds, and Eurobonds.

Today, this can be done on the Moscow Exchange through

professional securities market participants, or brokers. The

choice of a broker should be taken seriously since the funds

on the brokerage account are not insured and their safety is

primarily ensured by the reliability of the intermediary. FG

BCS, JSC FINAM, Sberbank, FG Otkrytie are among the

ten leading market operators in terms of customers and

trading volume. For example, FG BCS takes third place in

the number of registered customers (140,772) and second

place in terms of trading volume (1,223,619,003,938

roubles), yielding to Renaissance Broker LLC. One of the

conditions for choosing a broker is the size of the

commission charged for brokerage services. Consider the

size of commissions for beginner investors who make

investments in stock market assets through the QUIK

Internet trading system on the Moscow Exchange.

while in other types of securities it is increasing. Other types

of securities, such as bonds and investment units, in the

operations of private investors in 2010 amounted to 1.9% of

the total investment, and 11.1% in 2014. This fact is

confirmed by the downward trend in the share of individuals

in transactions with shares; by 2018, it decreased to 37.6%,

when in 2010 it accounted for half of all transactions. On the

contrary, since 2011 there has been an increase in the

activity of individuals in corporate bond trading - their share

has increased from 1.1 % in 2011 to 4.2% in 2018

(6,19,20,21).

We will present general data on the profitability of assets

such as stocks and bonds. Dividends and the difference

between the market value of the purchase and sale of the

security are the income from the shares. The dividend yield

on shares usually does not exceed 5%. It is customary to

track the general dynamics of the stock market by the

MICEX index, which calculation includes 50 most liquid

shares of the largest and most dynamically developing

Russian issuers, the types of economic activities of which

belong to the main sectors of the Russian economy.

From the point of view of the commission on individual

investment accounts, the most attractive are FINAM JSC and

Otkrytie financial group with the commission size of

Summary

0.0354% and 0.057%, respectively, provided that investments

Over the past year, the MICEX index has changed by

are up to 1 million roubles. The least attractive is Sberbank,

which offers the opening of a brokerage account at rates that

significantly exceed the average level. This is due to the fact

that the implementation of brokerage activities in the stock

market is not the main activity for credit organizations. Thus,

the most attractive professional intermediary in terms of the

size of commissions and the conditions for opening a

brokerage and individual investment account is JSC FINAM

4.08%, and over the past three years, it has shown an

increase of 45.78%. This suggests that, in general,

investment in stocks is an attractive instrument showing

returns above bank deposits. At the same time, separately,

the shares included in the index can show both negative and

positive returns. The maximum yield was shown by

ROSAGRO PLC depository receipt - 173.14%, ordinary

Nizhnekamskneftekhim - 81.76%, Sberbank of Russia -

5.63%, preferred shares of Sberbank of Russia - 68.89%,

Aeroflot

companies

97.23%,

(

4).

The securities market is gaining more and more

popularity every year among areas of investing funds by

individuals.

In the Moscow Exchange, there is an annual increase in

customers who are individuals. It should be noted that

individuals occupy the largest share among all exchange

customers (95.4% in 2017). At the same time, the number of

active customers (customers who made at least one

transaction per month) from 2010-2017 decreased annually,

but in 2017 an increase of 19.4 thousand people was shown

and Transneft - 52.31%. Shares of such companies as Dixy

Group, Rusal, Megafon, Magnet, Norilsk Nickel, Lenta

showed negative annual returns. Thus, medium-term and

long-term investments in shares included in the MICEX

stock index can lead to profitability significantly exceeding

the yield of conservative instruments, but at the same time,

they can lead to losses of 10 or even 30% per annum

(

7,16,17,18).

Smaller but fixed yields are guaranteed by bonds. The

(

5).

yield of many bonds exceeds the expected level of inflation

and the average yield of a bank deposit. And when choosing

a bond, one should focus not only on profitability indicators

but also on the reliability of the issuer.

Attractive in terms of profitability is the foreign

exchange market. Most currency transactions are carried out

on the off-exchange currency market (8-15).

Today, such a market accessible to individuals is the

Forex market. To consider private trading in Russia, data

from the Finmarket information agency which is part of the

Interfax international group were used. For the fifth year

now, the analytical centre of this group, Interfax - Centre for

Economic Analysis, has been preparing a review of the

Forex market in Russia, as well as exploring the main

characteristics of this sector of the financial market.

Individual investment accounts are becoming

increasingly popular among private investors. As of May 1,

018, 117,109 accounts opened by individuals were

registered in brokerage and management companies; this is

1,195 more than the number of accounts opened in the first

months. The largest number of individual investment

accounts since the beginning of 2015 has been opened by

customers of Sberbank (32,170), FINAM (27,563), Otkrytie-

Broker (20,493), and BCS (17,482) [48]. Funds from

individual investment accounts are invested mainly in stocks

(

94%), as well as in federal loan bonds and corporate bonds

3%).

For individuals, stocks are of primary interest in the

equities market. In 2018, they accounted for 88.9% of all

investments of individuals on the Moscow Exchange. The

volume of investments in stocks is gradually decreasing,

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 865-869

Table 3: Leading Forex dealers in terms of the number of customers and the volume of average monthly turnover for 2018

Forex Dealer

Number of customers

Monthly average turnover

Thousand person

Market share, %

29.5

$ billion

Market share, %

27.1

Alpari

137

Forex Club

TeleTRADE

17,2

13.1

16,2

13.5

Table 4: Analysis of the performance of private Forex Club traders for the 1st half of 2018 (% of total customers)

1st quarter 2nd quarter

Financial

results

On average for

half a year

January

February

March

total

27.3

April

May

June

29.6

total

28.7

Profit

Lesion

Total

29.5

70.5

100

72.7

100

70,4

100

71.3

100

Table 7: Profitability assessment of private traders in Russia

Share of private traders,%

Score indicator

Change, %

017 year

2.66

2019 year

3.12

Very high

Good

0.46

1.97

1.01

-3.44

18.73

38.58

40.03

100

20.70

39.59

36.59

100

Average

Below average

Total

In Russia, approximately 460 thousand individuals use

the services of Forex dealers, while the average monthly

turnover in 2015 amounted to $ 330 billion. The total

amount of deposits attracted by brokers is $ 0.5 billion.

Despite the fact that in 2015 there was a decrease in the

volume of operations by 5%, the number of clients of Forex

dealers increased by 15% (9-14).

The three leaders of Forex dealers in terms of the

number of customers and the volume of average monthly

turnover are presented in table 3. They account for 59.8% of

the total services market. However, the same companies are

leaders both by the number of customers and by the average

monthly turnover. For example, table 4 presents data for the

Forex Club Company on the performance of private traders,

namely, the financial results of the activities of individuals

in the Forex market are reflected. To consider the

profitability of individuals in the Forex market in Russia, the

data shown in table 7 are used.

ability to correctly evaluate and analyse the market, on the

amount of funds in the trading account, and also on the

amount of time that is devoted to trading in the Forex market

(11, 12, 13). So, the following conclusions can be drawn as a

result of the analysis of personal investments of individuals:

1) The most popular among investment objects for

individuals are bank deposits. This type of asset is the most

reliable and least profitable. Today, the maximum

percentage of return on the largest commercial banks is

9.77%, which is several percentage points below the

inflation rate.

2) More profitable can be considered long-term

investments in gold by opening anonymised metal accounts.

In 2015, the increase in the price of gold amounted to

45.66% per annum.

3) Investments in stock market facilities can be made

both for the long and short term. Among individuals, there is

an annual increase in funds for the purchase of securities - in

2018, the volume of investments amounted to 805.2 billion

roubles, which amounted to 26.5% of the total savings of

individuals. The most popular type of asset is stocks, but

corporate bonds have begun to gain popularity since 2011,

and the share of individuals' investments in stocks has

decreased by 13% since 2010 to 37.6% of the total volume

of transactions with securities. The yield on shares included

in the calculation of the MICEX index over the past year

amounted on average to 14.08%. For individual securities,

this figure made from 32.44% to 173.14% per annum. For

bonds included in the list of 25 bonds with the highest

effective yield, the coupon averages 12.8% per annum.

Conclusions

Based on the above data, it can be concluded that the

activities of private traders in the Forex market, in general,

show a negative financial result. On average for the 1st half

of 2018, only 28% of trading accounts of private traders

showed profit (10). Some authors attribute the problem of

poor performance to inefficient money management. In

general, profitability in the Forex market has a wide range of

values. Profitability can be both at the level of profitability

of derivative financial instruments and even higher, and

show negative results. Its value will depend on the trader’s

Journal of Environmental Treatment Techniques

2019, Special Issue on Environment, Management and Economy, Pages: 865-869

) Individuals have access to structured products that

8. Kamakura W, Russell G. Measuring brand value with scanner

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provide a higher return on investment in derivatives market

objects, but at the same time provide capital protection of up

to 100%. Structured products in the Russian market are

available only to wealthy investors since the minimum

investment amount on average is at least 300,000 roubles.

Among the products offered by the largest companies in the

Russian market, the highest potential return is 50% for the

Europe 2017 product on the DAX30 index.

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5) The over-the-counter currency market Forex is among

998.

the opportunities to increase own funds. Activities in this

market relate to trading which is focused on making profits

through speculative transactions. About 460 thousand

individuals use the services of Forex dealers, and the total

amount of funds raised by brokers in 2015 amounted to $ 0.5

billion. Basically, activities in this sector of the financial

market require constant involvement in the process to obtain

the best results. On the average, this sector for individuals is

currently unprofitable: for the 1st half of 2018 only 28% of

trading accounts of private traders showed profit, while

1. Mishkin FS. Financial consolidation: Dangers and opportunities.

Journal of Banking and Finance.1999;23:675-691.

2. Lobão J, Pereira C. Looking for Psychological Barriers in nine

European Stock Market Indices. Dutch Journal of Finance and

Management. 2016;1(1):39.

13. Lima A, Mendes D, Paiva S. Outdoor Navigation Systems to

Promote Urban Mobility to Aid Visually Impaired People.

Journal

Information

Systems

Engineering

Management.2018;3(2):14.

4. Hasibuan AM, Saragih S, Amry Z. Development of Learning

Materials Based on Realistic Mathematics Education to Improve

Problem Solving Ability and Student Learning Independence.

6.18% of traders were not satisfied with their profitability.

International

Electronic

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Mathematics

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