Interview with Alexey Sukhorukov, First Deputy CEO of the Ukrainian Exchange
"An Order-driven market" has been long sought after. We were surprised that none of the Ukrainian exchanges had taken the vacant spot beforehand.
Alexey Sukhorukov, First Deputy CEO of the Ukrainian Exchange, told us about the success of the Ukrainian Exchange.
One can clearly state that the Ukrainian Exchange has had a very successful start to its trading activity. After the first month of trading, the trading volume of stocks on the trading floor was only slightly less than on the PFTS Stock Exchange. What can this sweeping market redistribution be accounted for?
The main reason for success was simply that the right technology was offered to the right market participants at the right time. The "Order-driven" market had long been sought after in the Ukraine, and, to be honest, we were surprised that none of the Ukrainian exchanges had taken the vacant spot before us. At the same time the market participants were well aware of the opportunities that this technology could provide them, which made it possible to launch the market within a very short time and make it liquid enough.
What role did investment companies – exchange founders, play in building liquidity on the Ukrainian Exchange?
They played a key role, and that’s the way it was supposed to be. Firstly, for the traders (UX shareholders) UX is not only a trading floor, it is also a business, with which growing capitalization brings more profit. Secondly, in the EX structure model not a single legal entity apart from the most active market participants have control over the exchange. It is vital for the Ukraine as the exchange now works for the traders and not vice versa.
Quote-driven market given green light
Can an "order-driven" market fully replace a "quote-driven" market in the Ukraine?
I don’t think so. A "quote-driven" market is needed in the Ukraine under the given circumstances. A "quote-driven" market is more convenient when dealing with securities with low liquidity or large lots. This type of market is also essential for direct trades.
How long do you expect a "quote-driven" market to be in demand?
For another 10 years at least. Moreover, in the near future we expect demand for this technology to rise. This trend will be observed due to the Federal Law "About stock companies" which makes it obligatory for all public companies to undergo listing procedure on one of the exchanges and their securities to be subject of constant trading. By rough estimation, the number of new companies listed on the exchanges will make several thousand. And naturally, a "quote-driven" market will be more suitable for trades with stocks of unknown issuers.
If the demand for the "quote-driven" technology is so high, have you considered the idea of implementing it on the Ukrainian Exchange?
It depends on the shareholders’ decision. Technologically we are ready to do that, that’s why I wouldn’t go so far as to say it won’t happen. However, the priority at the moment is the development of an "order-driven" market.
The number of individual clients will be rising
How many clients-physical persons are you planning to attract to the stock market with the help of DMA?
At the moment 250 individuals are connected to the DMA of the Ukrainian Exchange. Though by my expectations I predict that, by the beginning of 2010 there will be about 2000 individual clients the number will exceed 10 thousand by 2011.