Moscow Stock Market Reopens For Some Bond Trading

The Moscow Stock Exchange was partially reopened after being shut down for almost a month due to the Ukraine war. Only bonds issued by the Government of the Russian Federation may be traded as part of a phased market opening. 44:44 On February 24, the stock exchange closed hours after Russian President Vladimir Putin sent thousands of soldiers to Ukraine. Andrey Braginsky, head of the Moscow Exchange, said he hopes stock trading will resume soon. "Technically everything is ready and I hope this will resume soon," he said. The market reopened at 13:00 (10:00 GMT) but only for OFZ bonds, the Russian acronym for Federal Loan Obligations. In premarket trading, yields on those government bonds rose by almost 20%, the highest on record. A higher yield means the government will have to pay more to borrow and indicates the investment is riskier. The yield later settled close to 13% after trading began. Central Bank governor Elvira Nabiullina said on Friday the bank would maintain its key interest rate at 20% and would purchase government bonds to limit volatility. Meanwhile, oil prices jumped more than $3 on Monday, with Brent crude climbing above $111 a barrel. Prices moved higher after reports that the EU was considering whether to join the US in imposing an oil embargo on Russia. The European Commission said earlier this month it aimed to make Europe independent from Russian fossil fuels "well before 2030". The invasion of Ukraine, and sanctions imposed by western governments, are taking a toll on the Russian economy. The Russian rouble was steady against the dollar on Monday, trading at 104.83 RUB. However, after the invasion began, it was reduced to a quarter of the level. Some supermarkets restrict the sale of basic items such as salt and vegetable oil. Within four days of the start of hostilities in Moscow in Ukraine, the central bank more than doubled interest rates to 20%. Continued conflict and stronger sanctions further weakened trust. There have been concerns about Russia defaulting on its debt, but it paid $117 million in interest on two dollar-denominated bonds last week.

 

Ali Yetgin