Russia partially reopened its stock markets Thursday with heavy restrictions on trading, following a month-long shutdown that was put in place as Russia’s invasion of Ukraine and subsequent Western sanctions caused a massive selloff that cratered the market.
The Moscow Exchange resumed trading in 33 Russian stocks including major companies like Gazprom, Sberbank, Rosneft and VTB at 9:50 a.m. local time.
Investors are banned from short selling these equities and a halt on foreigners selling these stocks also remains in place.
Half hour after trading opened, the MOEX Russia Index was up more than 10% at around 2,720 rubles, after it had slumped a record 45% on the day Russia’s invasion began.
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By Elliot Smith
Short-selling on stocks will be banned, however, and foreign investors will not be able to sell stocks or OFZ ruble bonds until April 1.
The MOEX Russia Index was up more than 10% around 20 minutes into trading.
At the other end of the index, Shares of Russian airline Aeroflot initially plunged more than 20%, but soon pared losses to trade around 6% lower a short while later.
The country’s stock exchange had been closed since Feb. 25 as Russian assets plunged across the board following the country’s invasion of Ukraine and in anticipation of the punishing international sanctions that followed.
Shares rose in Russia as the Moscow stock exchange partially reopened following a trading suspension of more than three weeks after sanctions sent equities into freefall. The benchmark Moex index was up about 9 per cent in morning trading with shares changing hands in Moscow for the first time since February 25.
Trading resumed in 33 of the 50 stocks that make up the Russian equity benchmark, including Gazprom, Sberbank, Rosneft and VTB Bank, for a shortened trading session running from 9:50am to 2pm Moscow time. The resumption of trading comes days after Russia’s central bank took its first steps to settle billions of dollars worth of equity trades by international investors that had become trapped when Vladimir Putin introduced capital controls in late February.
Many restrictions remained in place even after the bourse reopened. Short selling was banned and while local investors were allowed to trade relatively freely, foreign investors were unable to exit the market. And while trades could be settled in both US dollars or roubles, foreign investors were still forbidden from selling shares until April 1. All money must also remain in Russia even after investors cash out.
The White House blasted the partial reopening of Moscow’s stock exchange as a “charade” ahead of President Joe Biden’s appearance at meetings with Nato, G7 and EU leaders in Brussels, vowing that the US would seek to further isolate Russia from the global economy as long as Putin continued his war against Ukraine. “Russia has made clear they are going to pour government resources into artificially propping up the shares of companies that are trading.
This is not a real market and not a sustainable model,” said Daleep Singh, deputy US national security adviser, in a statement on Thursday morning. “What we’re seeing is a charade, a Potemkin market reopening.” The Moex gains on Thursday still left the stock benchmark down almost 30 per cent this year, while Russia’s rouble has fallen about a fifth against the dollar over the same period.