(Bloomberg Opinion) — Russian government intervention to prop up the stock market helped stave off another sell-off in shares on the first day of trading after nearly a month of wartime shutdown.
The MOEX Russia index ended this Thursday the session with an advance of 4.4%, a measure that the country took measures that prevented foreigners from leaving local stocks and prohibited short sales to prevent a repetition of the 33% drop observed. the first day of the invasion of Ukraine. The benchmark index fell 30% in February before the suspension of trading from February 28.
The Moscow Stock Exchange said the share of retail investors in today’s trading volume was 58%, with 567,000 retail traders taking part along with 121 professional participants, according to a statement on its website. Total trading volume during the four hours today was 108.6 billion rubles ($1.1 billion), the exchange said. It compares with 190 billion rubles of the average daily volume in January-February, according to the exchange.
“With restrictions on selling abroad and repatriation, this is not a functional market in terms of efficient pricing as foreigners dominate the free float of the market,” said Hasnain Malik, a strategist at Tellimer in Dubai.
Russia, hit by unprecedented sanctions, had also said its wealth fund stepped in and supported the stock market with up to $10 billion when it reopened, while President Vladimir Putin on Wednesday fueled the ruble’s decline by demanding payments. in local currency for purchases of natural gas from “enemy” nations.
However, local market participants such as Elbek Dalimov, the Moscow-based head of equity trading at Aton, said they saw no major trading deals today that would indicate the involvement of the sovereign wealth fund or large pension funds. He noted that many retail traders bought Russian stocks during today’s session as a hedge against inflation. Foreigners, who have been restricted from selling, own more than half of the free float of the Russian stock market, he said.
The Moscow Stock Exchange resumed trading on Thursday in 33 of the 50 shares listed on the benchmark index. Among the biggest gainers were gas giant Gazprom PJSC and oil giant Lukoil PJSC, while Aeroflot PJSC tumbled along with Mobile TeleSystems PJSC and Inter RAO UES. Other major oil eras including had and outperformed as oil surged more than 20% in the past month as the stock market remained closed.
Russia puts floor under stock market sell-off as trading resumes
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