S&P Dow Jones has announced that it will remove all shares registered or established in Russia from its benchmarks, the S&P 500 and the Dow Jones Industrial Average, due to the invasion of Ukraine.
In a statement issued in New York on Friday, the company said the order would take effect before the market opens on Wednesday (March 9th).
Russia will be further isolated from the world economy by declassifying it as an emerging market, also in force Wednesday. It will then be categorized as a stand-alone group.
The company said it had consulted market participants as a result of recent sanctions and restrictions on market access.
“S&P DJI is now announcing that it will remove all stocks listed and / or established in Russia (including ADR / GDR) from its standard stock indices at zero price, effective before opening on Wednesday, March 9, 2022.” reads the statement.
“Furthermore, given the deteriorating level of accessibility in the Russian market, which could affect the ability of market participants to copy S&P DJI indices containing Russian securities, S&P DJI will reclassify Russia from an emerging market to a ‘stand-alone ““.
Russia’s market status will not be reassessed before the 2023 annual review of the S&P DJI Country Classification.
Reclassifying it as an emerging market would involve the standard review process, which implies that there will be no chance of reversing the decision immediately.
The company will continue to calculate and publish Russia-specific indices as part of its stand-alone status, keeping them separate from broader regional and global indicators.
They will also be assessed in terms of Russian-based investors, given that investors in the US, the UK and the EU are not eligible for market participation due to sanctions.
The move by S&P Dow Jones is just the latest measure introduced to punish Russia economically for its invasion of Ukraine.
Severe sanctions have been imposed by the United States, the European Union and the United Kingdom, and the Biden administration is now considering a ban on imports of Russian crude oil from the United States under pressure as Congress races to pass such a restriction.
Many Western companies, both industrial and consumer-oriented, in a wide variety of sectors, have stopped trading in Russia.
Wall Street fell at the end of a volatile week on Friday as the war in Ukraine overshadowed the acceleration in US job growth last month, pointing to a boosting economy.