x

Economy

Russian Stock Market, Crushed by War, Resumes Trading

NEW YORK — The Russian stock market resumed limited trading Thursday under heavy restrictions almost one month after prices plunged and the market was shut down following Moscow’s invasion of Ukraine.

Trading of a limited number of stocks including energy giants Gazprom and Rosneft took place under curbs that are meant to prevent a repeat of the massive selloff that took place Feb. 24 in anticipation of Western economic sanctions. Foreigners cannot sell and traders are barred from short selling, or betting prices will fall.

The benchmark MOEX index gained 8% in the first minutes of trading.

The reopening of stock trading on the Moscow Exchange has little impact on investors outside Russia. Its market capitalization is a fraction of that of major Western or Asian markets.

Foreign investment managers lost one reason to buy Russian stocks after MSCI Inc. declared the market to be “uninvestable” following the Feb. 24 invasion and removed it from global indexes.

Hundreds of U.S., European and Japanese companies have pulled out of Russia.

There have been bank runs and panic buying of sugar and other staples. The exchange rate of Russia’s ruble has tumbled.

Foreigners are barred from selling shares under rules imposed to counter Western sanctions against Russia’s weakening financial system and currency.

Trading will be allowed in 33 of the 50 companies that are part of the country’s benchmark MOEX index, including air carrier Aeroflot, state-owned gas producer Gazprom and the oil company Rosneft, according to a central bank announcement.

Stocks last traded in Moscow on Feb. 25. A day earlier the MOEX sank 33% after Russian forces invaded Ukraine.

Moscow’s stock exchange had a market capitalization of about $773 billion at the end of last year, according to the World Federation of Exchanges. That is dwarfed by the New York Stock Exchange, where the total of all equities is roughly $28 trillion.

Russia’s central bank relaunched trading in ruble-denominated government bonds this week.

The central bank estimates that roughly 7.7 trillion rubles, equal to $79 billion, of Russia’s stock was owned by retail investors as of late 2021.

Russia’s government may intervene to support its companies and investors. Prime Minister Mikhail Mishustin said March 1 that the country’s National Wealth Fund would purchase up to 1 trillion rubles ($10.2 billion) in Russian shares by the end of the year.

Before the war, foreign investors were showing growing interest in Russian stocks as an emerging markets opportunity. But roughly a week into the war, Russia was removed from emerging markets indexes compiled by MSCI, a division of Morgan Stanley.

MCSI said that after consultation with a large number of asset managers it determined the Russian stock market to be “uninvestable.” That took away a primary incentive for fund managers to invest there.

On March 3, the London Stock Exchange suspended trading in shares of 27 companies with links to Russia, including some of the biggest in energy and finance.

The shares lost most of their value prior to the suspension.

Rosneft shares dropped from $7.91 on Feb. 16 to 60 cents on March 2. Sberbank plunged from $14.90 to 5 cents.

 

RELATED

The actions — or more notably, the inaction — of a school district police chief and other law enforcement officers moved swiftly to the center of the investigation into this week's shocking school shooting in Uvalde, Texas, The delay in confronting the shooter — who was inside the school for more than an hour — could lead to discipline, lawsuits and even criminal charges against police.

Top Stories

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

General News

PHILADELPHIA – The Federation of Hellenic Societies of Philadelphia and Greater Delaware Valley announced that the Evzones, the Presidential Guard of Greece will be participating in the Philadelphia Greek Independence Day Parade on March 20.

Video

Mission…To The Holy Land – A TNH Documentary by Clelia Charissis

This past Easter season, this great feast, Pascha for Greek Orthodox Christianity and Passover for Judaism, found us during Holy Week in the Holy Land, at the Gate of Worship.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. abc@xyz.com

You may unsubscribe at any time using the link in our newsletter.