RUSSIAN STOCK MARKET HAS EXPERIENCED THE WORST COLLAPSE EVER

After the Russian state recognized the independence of the DPR and LPR, the military operation began and the securities market experienced an unprecedented collapse.  Experts note that it is two times higher than what happened in 1997.  The Moscow and St. Petersburg Stock Exchanges were forced to suspend trading on February 24.

It is known that the Moscow Exchange index fell yesterday by 45.4% (below 1700 points). For comparison, the previous ‘record’ was set on October 28, 1997. Then the index fell by 20.81%. This time the RTS index fell below 700 points - its fall was 49.25%.

Experts note that everything that the Russian stock market has achieved over the past five years was lost in one day.

The wave of sanctions, already announced by the Western countries, may lead to the forced closing of positions by investors. The volatility of the Russian market is hard to stop. At the same time, despite the financial interventions of the regulator, the exchange rates of the main currencies (euro and dollar) against the ruble continued to grow.

The most vulnerable in the current situation turned out to be the shares of credit institutions that fell under the sanctions (Sberbank, VTB, Gazprom). They lost over 50% of their value. The index, despite the correction, could not return to 2000 points.

Shares of large Russian retailers have undergone a collapse as well.

Many, including Ozon, lost almost a third of their value at the beginning of trading and continued to fall. The shares of Magnit, Lenta and Detsky Mir dropped by 34%, 24% and 17% respectively.

Securities of the leading Russian telecom operators have undergone a decrease. Shares of MTS and Rostelecom fell by 21.68% and 27.69% respectively. At the same time, the securities of the Beeline network (Veon) sank even more significantly (by 27.69%).

After the speech of the President of the United States, who announced sanctions against Russian companies, the assets of some firms even strengthened. At the same time, shares of Rusal, which had sagged earlier, rose immediately by 30.5% (up to 77.7 rubles per share). Investors thus reacted to the fact that the aluminum producer was not included in the list of sanctions. Experts attribute this to the fear of the Biden administration to introduce measures against a company that supplies about 10% of the total volume of imported aluminum to the United States.