Russian Stock Market Jumps after Being Closed for a Month
The stock market of Russia jumped in its first, limited trading session after a month of western sanctions were imposed on the country, but the rally was overshadowed by government moves to prevent foreign investors from selling shares.
The MOEX benchmark has increased by about 4%. Only 33 shares of the index's 50 stocks were tradable during the short session. Russian energy giant Gazprom PJSC is up 13% and rival Lukoil PJSC is up 12%. Energy prices have risen since the last trade. Despite facing sanctions, the actions of Russian banks are contradictory. VTB Bank PJSC fell 5.5%. Sberbank Russia PJSC rose 3.9%.
The central bank of Russia has banned short selling, to prevent a sell-off, where investors bet the value of stocks will fall, and to prevent foreign investors, who contribute a large portion of the market, from selling their stock. The Kremlin also ordered a Russian sovereign wealth fund to buy about $10 billion worth of shares.
Prior to the war, foreigners owned around three-quarters of the freely traded shares in Russia and were responsible for around half of the trading volume each day. The Russian share trading provides limited information about the true value of companies without these foreign investors.