War-ravaged Russian stock market resumes trading | business news

    NEW YORK (AP) — The Russian stock market resumed limited trading Thursday under tight restrictions nearly a month after prices plunged and the market closed following Moscow’s invasion of Ukraine.

    Trading in a limited number of shares, including energy giants Gazprom and Rosneft, took place under restrictions intended to prevent a repeat of the sell-off that took place on February 24 in anticipation of Western economic sanctions. Foreigners are not allowed to sell and merchants are prohibited from selling short, or stake prices will fall.

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

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

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

    Hundreds of American, European and Japanese companies have withdrawn from Russia.

    There have been bank runs and panic buying of sugar and other staples. The exchange rate of the Russian ruble has plummeted.

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

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

    The shares were last traded in Moscow on February 25. A day earlier, the MOEX sank 33% after Russian forces invaded Ukraine.

    The Moscow 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 for all shares 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, equivalent to $79 billion, of Russia’s shares were owned by retail investors at the end of 2021.

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

    Before the war, foreign investors were showing growing interest in Russian equities as an emerging market opportunity. But about a week after the war, Russia was removed from emerging market indices compiled by MSCI, a division of Morgan Stanley.

    MCSI said that after consulting with a host of asset managers, it determined that the Russian stock market is “uninvestable.” That removed a main incentive for fund managers to invest there.

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

    The shares lost most of their value before the suspension.

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

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