Russia frozen out by stock exchanges and index providers

The London Stock Exchange (LSE) suspended with immediate effect the trading of global depository receipts (GDRs) of several Russia-based companies including Rosneft, Sberbank, Gazprom, En+ and Lukoil.

The LSE has 24 companies incorporated in Russia trading on its bourse, of which 17 are suspended. GDRs are negotiable certificates issued by a bank which represent shares in a foreign company but traded locally.

However, the ban also affected a number of other Russian companies such as En+ which is incorporated in the UK.

The LSE’s move to suspend Russian depositary receipts is “in connection with events in Ukraine, in light of market conditions, and in order to maintain orderly markets,” LSE said in a statement.

It also noted that less than 1% of its total income comes from operations in Russia and Ukraine.

Deutsche Börse, Germany’s largest stock exchange operator, suspended trading in shares of 16 Russian companies, including Aeroflot, Rosneft, Sberbank, VTB and VEB Finance.

In the US, Nasdaq and Intercontinental Exchange’s NYSE have temporarily halted trading in the stocks of Russia-based companies listed on their exchanges, their websites showed.

Market participants said the moves were due to regulatory concerns as the exchanges seek more information following economic sanctions imposed on Russia because of its invasion of Ukraine,.

Meanwhile, index providers MSCI and FTSE Russell have also removed Russian equities from their widely-tracked indexes.

An overwhelming majority of market participants see the Russian market as “uninvestable” and its securities will be removed from emerging markets indexes effective March 9, according to MSCI.

The Dow Jones Russia GDR Index, which tracks companies like Gazprom PJSC and Sberbank of Russia PJSC, has plunged about 96% in the past two weeks.

©Markets Media Europe 2022

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