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Russia’s stock market reported gains during limited trading on Thursday as it reopened for the first time since the initial stages of President Vladimir Putin’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, which totals $773 billion, is a fraction of that of major Western or Asian markets.
In stark contrast, the total value of all equities listed on the New York Stock Exchange is roughly $28 trillion.
In the days after the invasion began, MSCI Inc., the global equity index, declared the Russian stock market “uninvestable” for foreigners. MSCI removed the Moscow Exchange from global indexes.
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 pulled up stakes and either downgraded business ties with Russia or suspended operations in the country altogether.
The value of the ruble has plunged while Russians made a run on the banks, withdrawing their cash from the ATMs. Staple items like sugar have been bought up in a panic.
Foreigners are barred from selling shares under rules imposed to counter Western sanctions against Russia’s weakening financial system and currency.
Investors will be permitted to trade shares of 33 of the 50 companies listed on the MOEX index.
The Russian central bank said that shareholders will be able to buy and sell stock of air carrier Aeroflot, state-owned gas producer Gazprom and the oil company Rosneft.
Stocks last traded in Moscow on Feb. 25. A day earlier the MOEX sank 33% after Russian forces invaded Ukraine.
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.
Earlier this month, President Biden predicted that the Russian stock market would “blow up” the second it reopens in response to crippling sanctions that have been imposed on the country in response to its invasion of Ukraine.
“[The] Moscow stock exchange is closed for a simple reason,” the president told supporters in Philadelphia on March 11.
“Why is it closed? Because for the last two weeks because the moment it opens, it will be disbanded. Hear me? It will blow up. Credit rating agencies have downgraded Russia’s government to junk status. Junk status,” he added.
With Post wires
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