Soviets given chance to learn stock market

October 11, 1990|By Los Angeles Times

MOSCOW -- Would-be investment bankers, stockbrokers and traders of the Soviet Union got a rare chance this week to grill American experts representing the New York Stock Exchange about everything from savings bonds to insider trading.

The opening day of a Soviet stock market is at least several months away. But Soviet financiers invited the New York Stock Exchange, that bastion of capitalism, to tell them all they could about buying low and selling high.

"We're starved for information about financial markets," Alla Y. Seliverstov, a lecturer at Moscow Commercial Institute, said after a session on the public debt market.

About 400 Soviets -- government and commercial bankers, economists studying financial markets and even some fledgling brokers -- attended the three days of sessions to learn all they could about how markets work in other countries and how the Soviet Union might develop its own.

"We will not leave here as professionals," V.A. Pekshev, a deputy chairman of Gosbank, the state banking system, told an audience of both up-and-coming and long-time financial specialists. "But we will leave with an idea of how difficult it will be for us to understand financial markets."

The Soviet Union plans to create a stock market as it makes a very complicated transition from a centrally planned economy, controlled by the Communist Party leadership, to a market-based system.

But the Soviets attending the seminar differed in their predictions on when the Soviet stock market will open. Some said within a few months, others guessed about six months and still others predicted not until the end of next year.

Many said that the Soviet currency must become freely convertible with foreign currencies and state-owned industries must be turned over to private ownership before a viable stock exchange can be created.

John J. Phelan Jr., chairman and chief executive of the New York Stock Exchange, was cautiously optimistic about the prospects for a Soviet financial market, although people here generally disapprove of those who buy at low prices and resell at a profit.

"If the model goes the way they think it will go, there is no reason that, within a reasonably short time, at least the beginnings of an exchange cannot be developed," Phelan told a news conference.

The New York brokers, investment bankers and commercial lawyers at times bewildered their Soviet audience with terminology such as "over-the-counter secondary markets," "Treasury securities" and "zero-coupon bonds," but the Soviet participants were generally well informed.

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