A board bearing the Moscow Stock Exchange logo is on display at its office in Moscow, Russia, on March 10, 2020.Reuters / Shamil Jumatov
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March 23 -Russia will resume trading on Thursday after a nearly one-month hiatus with 33 rubles trading on the Moscow Stock Exchange. However, non-residents must wait. The sale of stocks and OFZ ruble bonds will be banned until April 1.
Blue chip transactions, including state lenders Sberbank (SBER.MM) and VTB (VTBR.MM), energy majors Rosneft (ROSN.MM) and Gazprom (GAZP.MM), line between 0650 and 1100 GMT. I will. The central bank said Wednesday that it would ban sales.
Russian stocks were last traded on the Moscow Stock Exchange on February 25th. Later, Western sanctions on what happened in Ukraine disrupted the market, and the central bank curtailed transactions.
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According to the Moscow Stock Exchange, foreign investors will be able to take steps to reduce their obligations, such as repo and derivative transactions, until April 1, but selling stocks and OFZ ruble government bonds will not. you can not.
When the central bank reopened on Monday, it said it would begin buying OFZ ruble government bonds to support the domestic debt market, and the Treasury plans to spend 1 trillion rubles to buy shares in Russian companies.
Limited resumption by MOEX is the most liquid, including Apple (AAPL.O), with SPB Exchange (SPBE.MM), Russia’s second largest stock exchange, partially reopening foreign equity trading on Monday. It takes place after enabling the trading of 15 high-quality shares. Amazon (AMZN.O), Boeing (BA.N), Alphabet (GOOGL.O).
From noon on Wednesday, SPB Exchange allowed players in the domestic market to buy and sell securities of another 1,639 foreign companies. Most of them are Russian residents who trade foreign stocks using the platform.
Transactions and settlements will take place in US dollars, but the funds will remain in the securities account and cannot be cashed under Western sanctions against Russia and capital restrictions introduced by Moscow in retaliation, the exchange said.
Fall into loss
Trading of OFZ government bonds resumed on Monday and the central government purchased OFZ paper to limit volatility.
Yields on some OFZs, including benchmark 10-year Treasuries, surged to nearly 20% on Monday, the central bank’s benchmark interest rate level, and then settled from 14% to 17%.read more
Volatility has put some players at risk, according to Univer Capital, a medium-sized Russian brokerage firm, facing a forced sale of OFZ held by Russia’s National Clearing Center (NCC) on behalf of its clients on Monday. Did.
Artyom Tuzov, executive director of the capital markets division of Univer Capital, said the fall in OFZ prices was inversely proportional to yields, resulting in margin claims and a lack of liquidity for securities firms.
“NCC blocks the company’s trading restrictions and, as a result, sells (our OFZ) assets. After the (mandatory) sale is over, the trading restrictions will be unblocked,” Tuzov told Reuters. Told.
According to a Universal Capital internal note confirmed by Reuters and confirmed by Tsuzov, NCC sold OFZ owned by Univer Capital at a yield of 17% to 20%.
As a result, nearly 100 Univer clients faced a total loss of 174 million rubles ($ 1.7 million), the memo said.
NCC’s parent company, the Moscow Exchange, said in a statement, “All operations by NCC are aimed at limiting systematic risk, so the problem of a single brokerage firm spreads throughout the market. There is no such thing. “
Alexei Timofeyev, head of the Russian stock market lobby NAUFOR, said securities firms are funding state to replenish liquidity, unlike banks backed by central banks in repo transactions offering trillions of rubles. Said it was not available.
“Unfortunately, the repo mechanism of securities firms developed after 2008 (by the central bank) will not come into effect, and securities firms that do not belong to large banking groups will be in a worse position than lenders,” he said. Said.
Two other major Russian brokerage firms, Aton and Finam, said they were both sufficiently liquid, but Finam also faced margin claims for a small number of clients after the OFZ market reopened. I added.
“Margin claims tomorrow (when the stock market reopens) are inevitable. The market has changed dramatically,” said Timofeyev of NAUFOR, and securities firms are preparing to close some positions. He added that he tried.
According to the Central Bank, transactions on the derivatives market with Moscow Stock Exchange contracts and personal stocks included in the Moscow Stock Exchange index usually go from 10 am to 2 pm (0700 to 1100 GMT). Will be.
The next day’s trading system will be announced at a later date.
($ 1 = 100.4345 rubles)
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Report by Reuters; edited by Andrew Heavens, Alison Williams, Hugh Lawson
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