The Russian stock market posted gains during 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 amid restrictions aimed at preventing a repeat of the massive sell-off that took place on February 24 in anticipation of western economic sanctions.
Foreigners cannot sell and dealers are barred from short selling or bet prices will fall.
The benchmark MOEX index 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 combined value of all stocks listed on the New York Stock Exchange is around $28 trillion.
In the days after the invasion began, the global stock index MSCI Inc. declared the Russian stock market “uninvestable” for foreigners. MSCI 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 withdrew shares and either downgraded business ties with Russia or ceased operations in the country altogether.
The value of the ruble has plummeted as Russians rushed to banks and withdraw their cash from ATMs. Basic commodities such as sugar were bought up in a panic.
Foreigners are barred from selling shares under rules imposed to counter Western sanctions on Russia’s weakening financial system and currency.
Investors are allowed to trade shares of 33 of the 50 companies listed in the MOEX index.
The Central Bank of Russia said shareholders can buy and sell shares in airline Aeroflot, state-owned gas producer Gazprom and oil company Rosneft.
The shares last traded in Moscow on February 25. A day earlier, MOEX fell 33% after Russian troops invaded Ukraine.
The Central Bank of Russia resumed trading in ruble-denominated government bonds this week.
The central bank estimates that by the end of 2021, Russia’s stocks were worth around 7.7 trillion rubles, equivalent to $79 billion, owned by retail investors.
Earlier this month, President Biden predicted that the second it reopened, Russia’s stock market would “explode” in response to the crippling sanctions 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 in the last two weeks it will be dissolved from the moment of opening. hear me It will explode. Rating agencies have downgraded Russia’s government to junk status. Junk status,” he added.
With postal wires
https://nypost.com/2022/03/24/russian-stock-market-reopens-for-first-time-in-a-month/ The Russian stock market reopens for the first time in a month