Every trader on the MICEX stock market strives to add shares with high returns and low risks to their portfolio. The optimal choice in this case is the so-called blue chips of the Russian stock market. In our article we will look at where this term came from, by what parameters you can recognize these shares and get acquainted with 15 companies that have received blue chip status in the Russian Federation.

Blue chips of the Russian stock market: What is this?

The term “blue chips” comes from the English Blue Chips. The thing is that the most expensive chips in the casino were blue. Consequently, today this is the name given to the highest-yielding shares of Russian issuers, the most attractive to traders and investors.

In general, on the Russian stock market there are so-called first-tier shares, they are also blue chips. Trading volumes in these shares account for 85% of the total volume of all transactions carried out on the exchange.

There is an index of blue chips on the MICEX, which allows you to monitor price dynamics and the general state of the stock market. It is reviewed every three months. These stocks can be an indicator of the overall market, since the prices of blue chips determine the value of other stocks. A rise in the value of high-yield stocks leads to a general rise in the stock market, and if blue chips begin to lose value, then less popular stocks inevitably fall in price along with them.

In addition, companies with blue chip status are also included in the MICEX index calculation base.

How to recognize blue chips in the market?

All shares of blue chip companies meet certain parameters. It is by them that it is assessed whether a new company will be included in this prestigious list during its next revision, or whether one already on it will be excluded. Let's consider these criteria.

Liquidity

This is one of the key parameters for a company to obtain blue chip status. High liquidity allows you to quickly sell a share, without loss in value or with a slight loss. Thus, high liquidity allows traders and investors to make profitable transactions with minimal risks and makes such shares reliable and attractive for trading.

Small spread

The spread largely determines the liquidity of a stock. The smaller it is (the difference between buying and selling), the more liquid the stock is.

Low volatility

A related criterion to liquidity. The lower the volatility—the price fluctuations of a stock on the market—the more reliable and safe it is for investment. However, on the other hand, low volatility will not allow a trader to earn large amounts of money on quick speculation due to the absence of price jumps.

Trading volume

The greater the trading volume of a company's shares, the greater the liquidity we can speak of. Although there are rare circumstances when even stocks with high liquidity have low trading volumes, in most cases, focusing on this criterion, you can draw correct conclusions about the attractiveness of stocks for investment.

Capitalization

Of course, there are no strictly established frameworks to classify this or that company as a blue chip. But, fortunately, today traders and investors do not need to be at a loss when deciding whether to consider the shares of a particular company to be blue chips or not. You can view the list in the Moscow Exchange blue chip index calculation database and on the first lines of the MICEX index calculation database.

Today there are 15 blue chip companies on the Russian stock market. Now we will get to know them better.

Top 15 Tasty Stocks for Investors

The blue chips of the Russian stock market mainly include companies from the energy, metallurgy and oil and gas industries. Below is a list of them and the main parameters for ordinary shares.

1. Gazprom.
   Gas production company. The free float is 46% of all shares, the dividend yield is 4.99%.
2. "Sberbank".
   The largest bank in Russia. 48% of shares on the market, dividend yield 6.26%.
3. "Lukoil".
   Oil producing company. 55% of shares are available for purchase, yield is 4.35%.
4. "Norilsk Nickel".
   Metallurgical company. Capitalization about 2 trillion. rubles, dividend yield 6.86%.
5. Novatek.
   Gas company. 24% of shares are available for purchase, yield is 1.56%.
6. "Magnet".
   Retail chain of food products. 71% of shares outstanding, yield – 7.41%.
7. "NK Rosneft".
   Oil company. 11% shares outstanding, dividend yield 4.95%.
8. "Tatneft".
   Oil company. 32% of shares are available for purchase. Profitability – 5.58%.
9. "MTS".
   Company in the field of communications and telecommunications. On the market – 45% shares, profitability – 10, 20%.
10. "VTB Bank".
    27% of shares outstanding, dividend yield – 9.56%.
11. "Surgutneftegaz".
    One of the largest enterprises in the oil industry. 25% shares available, yield 2.32%.
12. AK "Alrosa".
    World leader in diamond mining. 34% shares available, yield 11.62%.
13. "Moscow Exchange".
    58% of shares outstanding, yield 6.29%.
14. "Severstal".
    Mining and steel company. 20% of shares on the market, yield – 16.50%.
15. "Inter RAO"
    Electric power company. 33% shares outstanding, dividend yield 3.35%.

So, we looked at the blue chip companies of the Russian stock market. You can learn how to competently use their shares to compile an investment portfolio, as well as skillfully predict price movements at Alexander Purnov’s School of Trading by completing

Blue chips are shares and other securities from a company with an impeccable reputation and a significant market capitalization. They are the most reliable indicator of the current state of the economy in the long term.

“Blue chips” are securities issued by large companies with long-term consistently high levels of profitability and dividend levels. The term was originally used in the gambling industry, where the most expensive chips were marked in blue.

Blue Chip Benefits

There are no clear criteria for classifying securities as “first-tier” or “blue chip” securities, and to determine them, each exchange platform is guided by its own methodology. But several general characteristics can be identified:

• The growth trend has been maintained for a long time and there is no sign of decline in the long term. This means that the stock price is determined by the real state of the company, and not by the actions of market speculators.
• Monopoly or significant market share with high capitalization rates (current share price multiplied by their number including those that are not in free float). Such companies, especially in the oil and gas, financial and telecommunications sectors, are more resistant to various negative factors and, in addition to their own resources, can count on government support.
• Activities are not limited to the domestic market, especially in the raw materials sector. Companies operating only domestically are more dependent on political decisions and cannot be considered reliable in the medium and long term.
• Blue chips are stocks with maximum liquidity and a large number of transactions during the trading session (up to 80% of the total daily turnover). Shares are considered to be Blue Chip if they can be converted into cash at any time within a maximum of 24 hours;
• Using the most advanced production technologies and marketing methods. Since the second half of the last century, raw materials and trading companies have been replaced by newcomers in the financial and IT sectors in various reliability ratings. Investors began to pay more attention to the presence of patents and the quality of management methods. Examples include Google, which became a market leader thanks to new search technologies, and Apple, whose impressive results were mainly achieved by the right marketing policies.
• Mandatory transparency of activities. Companies must comply with all regulatory requirements and provide the most complete financial statements confirmed by an independent audit. Thus, the risks of deceiving shareholders are minimized;

Blue Chips as market indicators

Blue chips make up the majority of leading stock indices, such as the American Dow Jones Industrial Average, Nasdaq or the British FTSE. The growth of shares of the largest companies is traditionally perceived by the markets as a positive factor, a signal of improved performance, including for securities and the “second tier”. Accordingly, the fall of leading stocks and indices indicates a deterioration in the performance of the national economy. Examples of indexes based on Blue Chips:

Investing in blue chips

Unlike cheap, or as they are also called, “junk” (penny stocks), there are no sharp price fluctuations, and the average return does not exceed 10% per year, even with a long-term upward trend.

Despite external stability, Blue Chips still cannot be considered a completely safe investment, which was clearly shown by the financial crisis of 2008 (remember Lehman Brothers and General Motors) - then leading banks and even government regulation were unable to cope with financial problems. But among conservative investors, large-cap stocks remain the most popular, and there are always specials on the market, such as the SPDR Dow Jones Industrial Average (DIA), an index mutual fund that replicates the Dow Jones blue-chip portfolio.

Blue chip stocks are in high demand not only in long-term investment portfolios, but also among stock traders. Despite the minimal difference between the purchase/sale price (spread), their high liquidity allows you to carry out a large number of transactions during the trading session, as a result of which the final profit can amount to a significant amount.

A controlling stake in blue chips is in most cases distributed to major shareholders during an initial public offering (IPO) and is not intended to be freely traded. For sale on the stock exchange (free float), additional issues are used, the shares of which do not give the owner greater powers in management and decision-making.

Antimonopoly restrictions and the entry of companies from developing countries into global markets are forcing more and more attention to be paid to “second” or even “third” tier shares, which may well change the balance of power in the list of “blue chips”. For example, from the original list of Dow Jones index companies from 1884, not a single one remains today.

Other interpretations of the term

Besides the stock market, the expression “blue chip” is widely used as a sign of reliability, high quality and stability. A few examples:

• blue chip borrower  — reliable borrower;
• blue-chip issues  — issue of first-class securities;
• blue-chip company  — a company with an impeccable reputation and good financial performance;
• blue chip stock  — shares with high dividends;

As a rule, GFs reflect the situation of the entire market: when the value of shares of well-known enterprises increases, the liquidity of the assets of second-ranking companies also increases. And, conversely, as the price of blue chips declines, the price of securities of smaller companies falls. GF is an ideal option for investors, regardless of experience in financial markets.

Peculiarities

Blue chip companies are characterized by large capitalization, order in financial matters and transparent accounting. Foreign GFs include Microsoft, Ford, IBM, Apple. In the Russian market, Gazprom, Rosneft, VTB, Aeroflot and others stand out. There is the following pattern: the more famous a company becomes, the faster its assets will become blue chips.

The stock market borrowed the term “blue chip” from poker, where the game process involves betting money. The equivalent of money are special chips of various shades. Blue among them is considered the most valuable and expensive.

Advantages and disadvantages

Any shares, compared to stock indices and bonds, are highly risky instruments. However, GF is considered as the safest type of valuable assets. It has such important advantages as:

• Stable growth over a long period of time. This process is determined by the real stock situation, and not by the speculative actions of third parties.
• Great economic potential. In this case, the enterprise may have the status of “monopoly” and high capitalization rates. In the process of market valuation of a company, the current value of shares is multiplied by their number within the market. The probability of bankruptcy is significantly lower compared to other legal entities.
• High liquidity. Trading volumes involving blue chips are quite high, they are always in high demand and are easy to sell.

By purchasing such shares, an investor can sell them later at the market price without much difficulty. The spread (the difference between the sale and purchase prices) in this situation is a few kopecks (cents), as a percentage - up to 0.1%. However, a significant disadvantage of GFs is considered to be the extremely low fluctuation of their value, because the general law of investment applies here: minimal risks bring low returns.

A completely different situation arises with shares of second and third rank companies, the spread of which reaches 10%. Securities with little liquidity may have a spread difference of 25-35%.

Interest in blue chips

Blue chips are extremely popular among most investors. In the stock market, newcomers always prefer to work with the most liquid and safe assets, including GF. Investors choose long-term prospects, so they invest in GF shares for several months or years. This approach to working in the market strategy is quite simple and effective. The profitability, although small, is stable.

The main goal of a trader is to make a profit by buying and selling securities at short time intervals (minutes, hours, days). When entering into trades with blue chips, he masterfully exploits their high liquidity, taking into account short-term price changes. It is worth noting that for short-term traders, GFs are not always of great interest due to the fact that their value cannot increase several times over a short period of time.

Alexander Kaptsov

Reading time: 12 minutes

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Many novice investors are wondering how to preserve and increase their savings in an unstable economy, when the incomes of not only ordinary citizens, but also seemingly successful companies are declining. In such conditions, it can be difficult to decide on reliable investment instruments and make the right choice. For those who want to start investing, but don’t know where to start, we advise you to pay attention to the blue chip shares of the MICEX (Moscow Interbank Currency Exchange).

What does Blue Chip Stock Market mean? Defining Characteristics

Blue chips are the shares of the most highly profitable and liquid companies. Where did this name come from? By analogy with blue chips in poker, which have the greatest value. As a rule, the “first echelon” regularly brings dividends, they are easily sold if necessary.

There are no clear criteria for selecting securities; many exchanges and rating agencies create a list of them for themselves. Although blue chips still have common characteristics.

The defining characteristics for selecting blue chips are:

• Positive dynamics of the company's development over a long period.
• Stable growth in the value of issued securities.
• Significant degree of capitalization. It’s even better if the company is a monopolist in the market.
• Good liquidity of its securities.

On the Moscow Exchange, the Blue Chip Index is calculated every three months based on the results of transactions in securities for the current period. The MICEX is Russia's leading stock exchange, where shares and corporate bonds are traded daily. Trading turnover is up to 98% of the turnover of all Russian exchanges and up to 70% of the global trading volume of shares and ADRs.

Advantages and disadvantages of MICEX blue chips

Advantages

1. Over the long term, shares provide stable dividends.
2. Provide protection of funds from excessive price fluctuations on exchanges.
3. They are the least vulnerable, since in difficult times large companies receive government support.
4. A high level of transparency for shareholders minimizes fraud on the part of issuing companies.

Blue chips have a number of undeniable advantages, therefore they are in steady demand not only among investors, but also among traders.
Blue chips do not have sharp drops in prices; their assets are highly reliable and resistant to economic crises. It is best to invest in stocks for a period of 5 years or more.

Which company shares are considered blue chips in Russia?

As a rule, blue chips include securities of monopolistic companies and leaders in their industries. Most often these are large banks with state participation, energy and oil and gas producing enterprises, and telecommunications companies.

According to the Moscow Exchange, the elite of the Russian stock market today are represented by:

• PJSC Gazprom

One of the world's leading energy giants, the year of its foundation is considered to be 1991.

For many years the company has been engaged in:

1. Search and development of mineral resources on the territory of the Russian Federation.
2. Gas and oil production.
3. Processing of hydrocarbons, their storage and transportation.

The length of Gazprom's gas transportation system is over 160 thousand kilometers and this is one of the best indicators in the world.

The main shareholders of the enterprise are: the state (up to 38.4%), OJSC Rosneftegaz (11.0%), OJSC Rosgazification (0.9%). The nominal value of one share is 5 SUR.

• OJSC "Sberbank of Russia"

Universal commercial bank, one of the largest banking structures in Russia and Europe. Its activities are controlled by the Central Bank of the Russian Federation. Sberbank securities are second only to Gazprom shares in liquidity, and even then not always.

The main shareholder of Sberbank is the Central Bank of Russia (50% + 1 voting share). Trading in shares on the MICEX accounts for up to 40% of total sales. The initial price of the asset is 3 SUR.

• PJSC Lukoil

Oil giant of Russia.

The main activities of the enterprise include:

1. Exploration and development of new oil and gas fields (the main resource base is located in Western Siberia).
2. Mining and processing of minerals.
3. Production of petroleum products and their sale.

Shares of PJSC Lukoil are distributed between CJSC National Settlement Depository (91.7%) and Depository Company Garant (2.5%). The rest are in the hands of individuals and legal entities. The nominal value of the share is 0.025 SUR.

The retail company, which began its work in 1994, currently has a fairly developed network of retail outlets in different regions of Russia.

It includes:

1. Over 1000 cosmetics stores.
2. 8346 grocery stores.
3. More than 100 Family Magnit stores.
4. 200 hypermarkets.

The company's main shareholders, who are its founders, own 52.9% of the shares. The remaining 47.1% of assets are available for free sale. Nominal value of one asset – 0.01 SUR

• OJSC "Surgutneftegas"

Another large oil and gas producing enterprise in Russia, created in 1993 after the separation from the structure of Glavtyumenneftegaz.

The leading areas of activity include:

1. Search for oil and gas bearing formations in Russia (main developments are carried out in the Khanty-Mansi Autonomous Okrug).
2. Extraction and sale of oil and gas.
3. Production of petroleum products, as well as petrochemical products and their marketing.

In 2008, the company successfully took 7th place among Russian companies in terms of profit.

The main shareholders of Surgutneftegaz are its subsidiaries (about 60% of shares). Some assets are available for free sale.

Today the nominal price of one share is 1 SUR.

• OJSC NOVATEK

The largest Russian producer of natural gas. Its exploration, production, processing and sales are the main areas of activity of NOVATEK. The company's gas reserves allow it to confidently occupy 4th place in the world among similar enterprises. The year the company was founded is 1994.

The main shareholders (as of 2012) are: ZAO Depositary and Clearing Company (45.8%), Deutsche Bank LLC (29.9%), UAC Gazprombank (10.0%), Levit LLC "(7.3%). The nominal price of the asset is 0.1 SUR.

• PJSC MMC Norilsk Nickel

The largest mining and metallurgical structure in the Russian Federation, founded back in 1989.

The scope of activity of the enterprise includes:

1. Exploration of new deposits of minerals, precious and non-ferrous metals.
2. Mining, beneficiation and processing of ore, sales of products.
3. Production of electricity and heat for own needs.

MMC Norilsknickel supplies the world market with more than 50% palladium, 18% nickel, 14% platinum and 2.8% copper.

The main shareholders of the company are: Interros holding (28.0% of assets), Russian Aluminum company (25.1%), Metalloinvest (4.0%). The remaining shares are in free float. The nominal price of one asset is 1 SUR.

• PJSC VTB Bank

The second largest Russian bank in terms of performance, second only to Sberbank of Russia. On its basis, an international financial group has been created, providing comprehensive services to clients in 19 countries. VTB Bank was founded in 1990.

The state controls 60.9% of the bank's shares. The remaining securities are in the hands of legal entities and individuals. The nominal price of the share is 0.01 SUR.

• OJSC NK Rosneft

One of the leading Russian companies, formed in 1991. Engaged in exploration and production of oil and gas, production of petroleum products and their sales.

The main holder of the company's securities is OJSC Rosneftegaz (69.5%). All these shares are managed by the state. Another 19.8% is held by legal entities and individuals, the rest is on free sale. The nominal price of one asset is 0.01 SUR.

One of the leaders of telecommunications structures in the vastness of Russia and the CIS countries. The number of company subscribers in 2016 reached 77.8 million people. The MTS brand is among the TOP 100 most expensive in the world. Subsidiaries are represented in Belarus, Armenia, Kyrgyzstan and a number of other countries.

The main shareholder of the company is AFK Sistema (51.5% of shares).

The rest is put up for trading on the MICEX and the New York Stock Exchange (48.5%). The initial share price is 0.10 SUR.

Which blue chips are the most profitable?

To participate in trading on the Russian stock market, enterprises put up only 30% of their shares (for comparison, in the USA this is 80%). True, most of them are blue chips. Newbie investors often have a reasonable question: which blue chip stocks are best to buy on the stock exchange? We study the profitability of companies.

Company name	Profitability of the enterprise in 2016 relative to 2015	Net profit, billion rubles	Total amount of dividends planned for payment, billion rubles.	Dividends per share, rub.
PJSC Gazprom	- by 31%	194,5	187,0	7,9
OJSC "Sberbank of Russia	ñ 3.8 times	117,8	3,5	2,6
PJSC Lukoil	ò 2.2 times	160,3	95,3	112,0
PJSC Magnit	Price 5%	41,0	17,0	84,6
OJSC Surgutneftegaz	- by 22%	30,7	6,1	6,9
OJSC NOVATEK	ñ 3.3 times	198,3	20,9	6,9
PJSC MMC Norilsk Nickel	13.4%	126,6	1,1	444,2
PJSC VTB Bank	ñ 3.1 times	34,1	8,5	0.00117
OJSC NK Rosneft	57.3%	129,0	124,5	11,1

When forming a stock portfolio for 2017, you should take into account three areas of the investment approach that help minimize risks while maintaining high returns on investments.

In this article we consider the topic of investing in stock markets. A list of blue chips are excellent securities for initial investment to increase your working capital. What is it and how to learn to make money on the Moscow Exchange.

How to become an elite

- a platform, which is an organized place for trading securities, regulated by a management body, which, in turn, is obliged to comply with the legislation established by the state. are now available in almost all developed and developing countries, from Papua New Guinea (Port Moresby Stock Exchange) to Uganda (Ugandan Securities Exchange). This indicates not only that world trade has truly reached planetary proportions, but also the correctness of the opinion that it is possible to earn a solid profitability, increase your capital and guarantee yourself a free, financially independent future anywhere on the planet.

2017 provides an investment opportunity for literally every ordinary citizen. In order to conduct your first transaction, it is not at all necessary to have a special higher education from any prestigious university. It is enough just to understand the trading process as such. Here all kinds of special literature and video lessons will help you. Stock markets are open to all investors, and there is no need to invest millions of dollars, as stereotypes might lead you to believe. A modern threshold entry to the exchange can start from just a few thousand rubles. But, of course, such small investments can only bring solid profits with incredibly cool trading applied over a long time period.

Russian trade

The general confluence of all trading matters within the Russian Federation takes place on the Moscow Exchange. This is the largest trading platform not only in Russia, but throughout Eastern Europe. Capitalization volumes are constantly increasing, involving money not only from new large companies, but also from tens of thousands of investors. The exchange is very welcoming for beginners, conducting all kinds of educational programs, seminars and lectures. The Moscow Exchange is the largest enterprise for servicing and supporting investment transactions in Russia and with the participation of issuers, which was founded in 2011 on the basis of two other platforms - RTS and MICEX (Russian Trading System and, respectively)

A novice investor will not be interested in the blue chips of the Russian stock market. In general, it should be noted that blue chips are the very first instrument that a beginner needs to get acquainted with. This name is given to shares of the largest, most stable and profitable corporations. Among Russian stocks, this includes such giants as Gazprom, Lukoil, Rosneft, Norilsk Nickel and other names that you hear every day from advertisements and news blocks.

Blue chips

Russian stocks included in the rank of blue chips are highly liquid, stable and expensive securities that have constant growth, but practically do not show sharp economic jumps. These are already established companies that are systematically, based on plans for many years to come, growing and growing, but you can make serious money here only in some cases:

• Long-term investing. If you invest in the most liquid stocks, you can be sure that you will not face serious losses. But you also won’t be able to get rich quick. These shares are growing slowly but surely, so you can count on serious profits only after several years. During this period there will be both upward surges and shallow short-term dips caused by market conditions. So don't be sad if you invested yesterday. Yes, you won’t become a millionaire tomorrow, but in a few years it’s quite possible. Therefore, from this point of view, investments in blue chips should be considered as long-term projects for the future. So take some time and money today to make such a deal. Your future will thank you.
• Dividend income. As you know, shareholders have the right to receive a portion of the company's total profits. This is called dividends. This amount of money will depend on the overall success of the corporation issuing the shares, which means you will have to count on the company showing good growth in a given year. Blue chips provide dividend yield, but in order to receive a good amount each year, you need to invest quite a large amount of money. Also keep in mind that shares can be both ordinary and preferred, which means that in the second option you will have the right to receive stable payments, but the shares are much more expensive.

The best of the best

The list of blue chip companies on the Moscow Exchange is as follows: Gazprom, Surgutneftegaz, Sberbank, Norilsk Nickel, Magnit, Lukoil, Rosneft, MTS, VTB Bank, Novatek, Moscow Exchange, Tatneft, Transneft and Uralkali. These are the main structural companies that ensure the functioning of almost the entire Russian economy, which means that investments in them will be very reliable. Also, the tasks of these corporations include organizing special congresses of shareholders, which only popularizes the culture of investing in our country.

Your task is also to select a broker, and for this we recommend that you familiarize yourself with the list of stock market brokers.