Status: 03/24/2022 4:30 p.m
Prices on the Moscow Stock Exchange rose after the reopening of stock trading. However, many government restrictions still apply – and only a few papers are allowed.
After a pause of almost a month, the Moscow Stock Exchange resumed trading in shares today. The leading Russian index Moex Russia shot up at times by eleven percent. Energy values in particular were in demand. Gazprom and Lukoil shares rose by around 20 percent at times. The reason is the high price of oil. Aeroflot shares, on the other hand, fell by 20 percent. Because Russian airlines have lost business. Most of the European airspace is closed to them.
However, only 33 Russian files were traded. That’s just 15 percent of all listed paper. There were also several trade restrictions. Short selling was forbidden, so investors were not allowed to bet on falling prices. Stock sales are also severely restricted. Russia’s central bank had already banned securities dealers from selling Russian stocks owned by foreigners in February.
“No real market”
The US government spoke of a “charade”. “This is not a real market and not a sustainable model, which only underscores Russia’s isolation from the global financial system,” Deputy National Security Advisor Daleep Singh said. Russia has made it clear that it will use state funds to artificially support the shares of trading companies.
Trading on the Moscow Stock Exchange was suspended after the Russian invasion of Ukraine on February 24 after the Moex Russia plummeted nearly 50 percent. Investors had tried to withdraw as much money as possible and bring it to safety. Shares in Russian companies have since been removed from major global exchange-traded index funds. There was a first small opening step earlier this week. Since then, Russian government bonds have been traded again.
Stocks as a hedge against inflation?
According to experts, the crash on the Russian stock exchange may well have attracted some domestic buyers. Perhaps they were doing so to brace themselves for the country’s skyrocketing inflation, which is eroding the value of cash.
However, German investors who still own Russian stocks listed abroad have a problem. The securities are not currently traded. Many investors recently sold their Gazprom shares, which were traded in the form of special certificates – so-called ADRs.
Ruble appreciates something
The Russian ruble recovered. The dollar lost more than two percent and was quoted at 95.65 rubles. The announcement by Kremlin ruler Vladimir Putin that he would only allow payments in rubles for Russian gas exports to “unfriendly” countries had already caused the Russian currency to appreciate yesterday. At the start of the Ukraine war, the ruble had fallen to a record low.