After two shortened trading sessions, with only a handful of most liquid Russian equities trading, the Moscow Exchange will expand trading to all securities on Monday.
A statement on the Russian central bank’s website details all listed securities on the Moscow Exchange will trade on Monday. Corporate and municipal bonds will also begin trading. Monday’s session will be four hours, and short-selling securities will be banned.
After a record-long stock trading halt that was instituted on Feb. 28, the Moscow Exchange resumed trading in 33 most liquid Russian equities on Thursday, including some of the biggest companies such as Gazprom PJSC and Sberbank PJSC.
To prop up the MOEX Index, Moscow took a page from Washington’s (and Beijing’s) playbook and unleashed its own version of the ‘plunge protection team‘ with its wealth fund purchasing at least $10 billion in equities in the last two sessions.
MOEX sunk 3.7% on Friday after rising 4.4% on Thursday.
The Russian government took other measures to mitigate liquidations, such as preventing foreigners from exiting domestic equities.
“Yesterday [Thursday], the main theme was hot money searching for tactical buying,” Dmitry Polevoy, an analyst at Locko-Invest in Moscow, told Bloomberg. “Today [Friday], we see some selling plus more activity from people who stayed aside yesterday seem to be driving the move.”
“Price-discovery will take time as it is hard to correctly assess new fair prices. The sanctions story is still open-ended,” Polevoy said.
Considering many Russian banks are banned from the SWIFT bank-messaging system and sanctions have roiled the country’s economy, some traders are concerned that the artificial prop in the MOEX is temporary.
“With restrictions on foreign selling and repatriation, this is not a functional market in terms of efficient price discovery, given foreigners dominate the market’s free float,” said Hasnain Malik, a strategist at Tellimer in Dubai.
