How-to: How to buy shares of technology companies on the example of "Yandex"
In the comments to one of the past topics of our blog, readers asked to reveal the topic of how to buy shares of Russian Internet companies. Therefore, today we will discuss how the Russian citizen will do this, and what steps will be needed to do this. As an example of such a technology company, it was decided to take “Yandex” - firstly, this company recently held a placement of shares on the Moscow Stock Exchange, and secondly, the purchase of its shares is most often of interest to our readers.
Disclaimer: This topic is of general informational nature, so those who are well versed in the subject and find this post not very interesting for themselves, we offer to share knowledge in the comments. In addition, there are several links to our corporate site in the text (not everyone likes that).
')
Some theory
Let's start with a small theoretical digression and talk about how the company's shares generally go to the stock exchange, and what can be done with them (using the example of the Moscow Exchange).
So, in order to have the opportunity to buy or sell shares of a certain company on the stock exchange, this company, as an issuer (one who issues shares), goes through the procedure of listing its shares on the stock exchange. According to the results of this process, the stock exchange brings shares to the Quotation list of the 1st, 2nd or 3rd level ( List of securities admitted to trading in CJSC MICEX Stock Exchange as of 02.07.2014).
Schedule of changes in the price of shares "Yandex" on the Moscow Exchange
From this point on, it becomes possible through a professional participant in the securities market to buy / sell the company's shares - in this case, the broker and the depositary are a professional participant (you can read more about the structure of the Russian stock market here and here ). To do this, the client must enter into an agreement for brokerage and depositary services. As part of the brokerage contract, the client will make transactions on the stock exchange, and under the depositary contract, stocks will be kept in the depository and the client’s rights will be accounted for.
When buying shares, the client becomes a shareholder of the issuing company and receives the right to participate in the management of the company and receive income in the form of dividends. The client realizes the right to manage the company through participation in shareholders' meetings at which the composition of the company's governing bodies is chosen, as well as voting on important issues. If the company makes a profit as a result of its activities, the board of directors may recommend to send part of the profits to pay dividends, and if the general meeting of shareholders decides to pay dividends, the shareholders will receive income from shareholding.
But not all shareholders will receive dividends, but only those shareholders who owned shares on a certain date. The client receives a profit not only from receiving dividends, but also from an increase in the market value of the share. In general, all of the above is true for stocks representing the IT sector, as well as companies from other sectors.
It should be noted that in the stock market, the main source of income for traders is still speculation (buy at a lower price, sell at a higher). In the comments to one of the past topics, hacker Zerkella described this mechanics very well (although he called the stock market a totalizator, which cannot be accepted at all), so let us quote some of his comments:
The business model of companies assumes constant growth and investment of money in the development of itself, and therefore dividend payments are rare and are viewed more as a negative occurrence (the company has stopped developing and is unable to come up with profitable methods for further business expansion). A company - as a person - either grows and develops, or grows old and soon dies. Therefore, companies prefer to grow, investing in their business all the free money.
The usual method of earning income from investments in the stock market is buying shares at a lower price and selling at a higher price (speculation). This is consistent with the company's constant growth model, and for such an income, no dividend payment is required. The mechanics are simple - the number of shares is constant, and the company's value grows as it develops and instead of paying dividends it increases its number of assets (in the case of Yandex, it buys data centers and programmers, creates more sophisticated user tracking and advertising targeting systems). Accordingly, the share price is growing.
This means that buying shares on modern exchanges in the calculation of dividends is not the best idea, since the company may never pay them out on perfectly legal grounds. It is much more logical to hope for a rise in shares in order to sell them profitably (or for a fall, with the goal of borrowing shares, selling them, and then buying them off at a lower price - the so-called short position).
How to buy Yandex shares on the Moscow Exchange
Yandex shares are listed on the list of securities admitted to trading on the Moscow Exchange (due to the fact that the company is legally foreign, the “Shares of a foreign issuer” is listed as the type of security).
Since a private person cannot trade on a stock exchange so easily, intermediaries are needed, companies that are professional participants of the stock market are brokers. Accordingly, in order to buy stocks (or futures and options ), it is necessary to open an account with a brokerage company. Brokerage services are provided not only by such companies, but also by some banks (a list of possible options for opening an account, as well as indicators on the number of clients, the trading volume of each company on a specific market of the Moscow Exchange, can be found here ). One of such accredited brokers is, for example, ITinvest - we have representative offices in various cities of Russia and in the capital of Azerbaijan, Baku - respectively, information on opening an account can be found either there or by leaving a request on the website.
After opening an account, a client can make a purchase or sell shares and other financial instruments using a trading terminal or by calling his brokerage company by phone and submitting an application by voice (in advance, of course, you will have to confirm your identity). Another option is to create an automated trading system that will connect to the brokerage system using an API and perform purchase and sale transactions using a set algorithm.
Workspace of the SmartX trading terminal
An important point - novice investors and traders are not recommended to immediately rush into battle on the real stock market. It is much more logical to first practice on a test account with virtual money - the Moscow Stock Exchange has a fully virtual stock market, which is no different from the present, including on it you can virtually buy shares of the same Yandex.
In the trading terminal, you need to select the market you need - Yandex shares are traded on the stock market section. Accordingly, you can choose a stock to buy in the terminal in a special table of quotations and buy it by making a request using a special window. After that, the shares will be credited to the account from which, in turn, the money will be written off. Similarly, the user will be able to sell stocks and get money.
A commission is charged for each sale and purchase transaction - it is taken by both the stock exchange and the broker. All fees of the Moscow Exchange are listed on a special page, for a fuller understanding of the possible costs, our website rates include both exchange and brokerage commissions. There are various tariff plans that are suitable for different styles of work in the stock market.
How to buy stocks on foreign exchanges
Papers of various Russian companies are traded on a variety of sites abroad, the most in demand are the LSE (London Stock Exchange), and the New York NYSE and NASDAQ.
In order to trade on these stock exchanges, you also need to contact your local broker to open an account (which is not so easy to do), or find a Russian broker who provides access to trading. Yandex shares, which we are considering today as an example, are being traded on the NASDAQ, respectively, a Russian broker will be needed who has access there (a good post for beginners about searching for options on NASDAQ can be read here ).
That's all for today. We hope that the pattern of acquiring shares of the Russian companies of interest has become a bit clearer for habra users. If you have any questions, we will be happy to answer them in the comments.
PS If you notice a typo or error, please send it to us by a personal message, and we will fix everything promptly.
Posts on the topic:
Source: https://habr.com/ru/post/229237/
All Articles