Russian stock exchange reopens for the first time in a month
The Russian stock market posted gains in limited trading on Thursday as it reopened for the first time since the early stages of President Vladimir Putin’s invasion of Ukraine.
Trading in a limited number of stocks, including energy giants Gazprom and Rosneft, took place under restrictions intended to prevent a repeat of the sell-off that took place on February 24 in anticipation of economic sanctions Western.
Strangers cannot sell and traders cannot sell short, otherwise betting prices will fall.
The benchmark MOEX gained 8% in the first few minutes of trading.
The reopening of stock trading on the Moscow Stock Exchange has little impact on investors outside Russia. Its market cap, which totals $773 billion, is a fraction of that of major Western or Asian markets.
In stark contrast, the total value of all stocks listed on the New York Stock Exchange is approximately $28 trillion.
In the days after the invasion began, MSCI Inc., the global stock index, declared the Russian stock market “uninvestable” for foreigners. MSCI has removed the Moscow Stock Exchange from global indices.
The invasion prompted Western governments led by the United States and the European Union to impose sanctions on the Russian economy.
Hundreds of multinational companies have taken stakes and either downgraded their business relations with Russia or completely suspended their operations in the country.
The value of the ruble plunged as the Russians ran on the banks, withdrawing their cash from ATMs. Basic items like sugar were purchased in a panic.
Foreigners are not allowed to sell stocks under rules imposed to counter Western sanctions against Russia’s weakened financial system and currency.
Investors will be allowed to trade shares of 33 of the 50 companies listed on the MOEX index.
Russia’s central bank said shareholders will be able to buy and sell shares of air carrier Aeroflot, state gas producer Gazprom and oil company Rosneft.
The shares were last traded in Moscow on February 25. A day earlier, the MOEX fell 33% after Russian forces invaded Ukraine.
Russia’s central bank this week restarted trading in ruble-denominated government bonds.
The central bank estimates that around 7.7 trillion rubles, or $79 billion, of Russian stocks belonged to retail investors at the end of 2021.
Earlier this month, President Biden predicted that Russia’s stock market would “explode” the second it reopens in response to the crippling sanctions that were imposed on the country in response to its invasion of Ukraine.
“[The] The Moscow stock exchange is closed for one simple reason,” the president told supporters in Philadelphia on March 11.
“Why is it closed? Because for the last two weeks because as soon as it opens it will be dissolved. Hear me? It will explode. Credit rating agencies downgraded the Russian government to junk status. Unwanted status,” he added.
With post wires