Following the invasion of Ukraine, Russia’s stock market has reopened for restricted trading, over a month after the market plummeted and the exchange was forced to close due to the crisis.
As soon as the market opens its doors on Thursday, there will be significant limits on trading in order to avoid the type of enormous selloff that occurred on February 24 in expectation of crippling financial and economic penalties from Western countries.
The reopening of the Moscow exchange has only a little relevance for investors outside of Russia and has a negligible economic effect when compared to the onslaught of US-led sanctions and the departure of international firms from the Russian stock market.
According to Ben Johnson, head of global ETF research at Morningstar, the typical exposure to Russia by a US investor via a mutual fund or retirement account is very low, if at all.
 The exposure to Russia would be around 0.02 percent of a standard 60 percent stock, 40 percent bond portfolio that was matched to a worldwide index, according to Johnson. “Russia scarcely registers,” says the author.Â
Russia has seen hundreds of foreign enterprises leave the country, as well as bank runs and panic purchasing of essentials such as sugar. The nation’s currency, the Ruble, has also suffered a significant depreciation.
Foreign shareholders will be unable to sell their shares as a result of the limitations in place, which were put in place to fight Western sanctions against Russia’s deteriorating banking and monetary systems and Ruble.
According to a central bank statement regarding the reopening, trading will be permitted in 33 of the 50 businesses that make up the country’s benchmark MOEX index, including the national airline Aeroflot, the state-owned gas producer Gazprom, and the oil major Rosneft.
 The last time stocks traded in Moscow was on February 25. The MOEX had dropped by 33 percent the day before, after Russia’s invasion of Ukraine.
Because of the restrictions now in place, it may be difficult to gauge investor mood. The practise of short selling, in which investors basically gamble on stock values falling, has been outlawed in the nation.
According to the World Federation of Exchanges, Moscow’s stock exchange had a market value of roughly $773 billion at the end of last year, making it the smallest in the world.
The New York Stock Exchange, on the other hand, has a total market capitalization of over $28 trillion, which dwarfs the previous figure.Â
 It took almost a month for Russia’s central bank to reopen trading in local government bonds denominated in Ruble, which had been suspended since December.
 Despite this, average Russians do invest in Russian stocks: according to the central bank, around 7.7 trillion Rubles, or approximately $79 billion, of Russia’s stock was held by retail investors as of late 2021.
Some of the world’s largest oil and financial businesses were among those affected by the London Stock Exchange’s decision to halt trading in their shares on March 3.
Before the suspension, the shares had lost most of their value. As of March 2, Rosneft’s stock price had fallen from $7.91 on February 16 to 60 cents. Russian bank Sberbank fell from $14.90 to only 5 cents.
Russia’s government may interfere to assist its enterprises and investors in their endeavours. As of March 1, Russia’s Prime Minister Mikhail Mishustin said that the country’s National Wealth Fund will acquire up to $10.2 billion in Russian stocks by end of the year.
Prior to the conflict, international investors were becoming more interested in Russian equities as a potential emerging markets investment strategy. Nevertheless, Russia was excluded from developing markets indexes maintained by MSCI, a subsidiary of Morgan Stanley, about one week after the start of the conflict.
Published by :Â Aditya AndhariaÂ
Edited By : Kritika Kashyap
