Russian stocks set to tumble as Moscow Stock Exchange reopens Business

The Moscow Stock Exchange will partially reopen on Thursday for trading in 33 companies, ending Russia’s historic market shutdown following Western sanctions.

The exchange will resume trading in select stocks after nearly a month-long record close, including in some of Russia’s biggest companies such as Gazprom, Rosneft, Sberbank and VTB.

The Russian central bank said the exchange will open between 9:50 a.m. and 2:00 p.m. local time, but short selling will be prohibited.

Foreign shareholders will also not be able to withdraw their investments due to restrictions on foreigners leaving local stocks.

The measure was introduced last month to protect Russia’s capital markets and economy from significant losses following Vladimir Putin’s invasion of Ukraine.

Hasnain Malik, strategist at Tellimer, an equity research house, said: “The very limited reopening will make little difference to outsiders who cannot sell and remain trapped, assuming they haven’t already reduced zero local assets.”

UK investment giants such as Legal & General, Abrn and Aviva have pledged to divest all of their Russian holdings as soon as possible, but have so far struggled to do so given restrictions on investors strangers.

Foreign holdings of Russian stocks stood at $86bn (£65bn) at the end of last year, according to data from the Moscow Stock Exchange.

Despite restrictions on foreign investors fleeing the country, analysts and traders are still bracing for a severe price drop as international sanctions hit the Russian economy, including its ability to access foreign exchange reserves.

On the day Russia launched its invasion of Ukraine, the Moex, Russia’s benchmark, fell 45%, the biggest drop ever.

The Moscow Stock Exchange will resume trading on Thursday in 33 stocks out of the 50 listed in the benchmark index.

On Monday, the stock market was partially reopened but only bonds issued by the Russian government were allowed to trade.

The exchange has been closed to stock trading since February 28. Before that, the longest stock market shutdown was in 1998, when Russia was in the midst of a severe financial crisis and closed the stock market for several days.

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This notice was published: 2022-03-23 16:06:34

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