After a record-long closure, Russia is preparing to reopen some stock trading Thursday. It’s been nearly a month since Russia’s stock market abruptly shut down over the country’s invasion of Ukraine.
On February 24, the first day Russia started its attack, stocks tumbled 33% in one day, erasing $189 billion in shareholder wealth. Now, on March 24, Bank of Russia plans to open limited trading for a little over four hours and only for 33 Russian equities, though they’re some of the biggest.
On February 24, the day Russia invaded Ukraine, the stock market crashed 33%, erasing $189 billion in shareholder wealth.
The challenge on the financial side is that reopening could send stocks plummeting again. To minimize the damage, the Bank of Russia announced that traders are banned from short selling, when you bet on and profit from a drop in share price. Even without that option, investors are steeling for a sell off.
However the market reacts upon reopening, it will only reflect part of the story, local equity trading. Foreign investors who might want to bolt are blocked from doing so: Russia has banned brokerages from letting foreign clients sell securities, a move made in response to sanctions.
To shield the nation from further market losses, Russia plans to deploy up to $10 billion from its National Wellbeing Fund to buy up struggling equities to minimize damage.
IT’S BEEN NEARLY A MONTH SINCE RUSSIA’S STOCK MARKET ABRUPTLY SHUT DOWN OVER THE COUNTRY’S INVASION OF UKRAINE.
AND AFTER THE RECORD LONG CLOSURE – RUSSIA IS NOW PREPARING TO REOPEN SOME STOCK TRADING THURSDAY.
THIS IS WHAT HAPPENED THE LAST WEEK THE STOCK MARKET WAS OPEN….STOCKS TUMBLED 33% IN ONE DAY – ERASING 189 BILLION IN SHAREHOLDER WEALTH.
THAT WAS THE FIRST DAY RUSSIA STARTED ITS ATTACK.
THE CHALLENGE ON THE FINANCIAL SIDE – IS THAT REOPENING COULD SEND STOCKS PLUMMETING AGAIN. THE BANK OF RUSSIA SAYS IT’S LIMITING TRADING THURSDAY TO ABOUT FOUR HOURS – AND ONLY FOR 33 RUSSIAN EQUITIES, THOUGHT to be SOME OF THE BIGGEST.
TRADERS ARE BANNED FROM SHORT SELLING – THAT’S WHEN YOU BET ON A DROP IN SHARE PRICE.
BUT EVEN WITHOUT THAT OPTION – INVESTORS ARE STEELING FOR A SELL OFF.
WHATEVER HAPPENS WHEN THE MARKET REOPENS – IT’S ONLY REFLECTING HALF THE STORY.
THAT’S BECAUSE FOREIGN INVESTORS WHO MIGHT WANT TO BOLT ARE BLOCKED FROM DOING SO. RUSSIA HAS BANNED BROKERAGES FROM LETTING FOREIGN CLIENTS SELL SECURITIES.
IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.
