After a month of being shut down amid conflict-driven turbulence, Russia’s stock market reopened this morning. Russian stocks are rallying as a result, with the Moscow Stock Exchange seeing gains of more than 4% so far today.
For investors looking to trade Russian companies on popular international exchanges, though, prospects don’t look so bright. Trading halts placed on Russian companies by the New York Stock Exchange remain in effect, for instance — and there’s no word on when they will be lifted.
Here’s what investors should know.
Russian Trades Halted on NYSE
U.S. investors wondering when they will be able to trade Russian stocks on U.S. exchanges again will have to wait.
Yesterday Yahoo! Finance reported that, while the Moscow Exchange was slated to resume trading today, Russian stocks listed on international exchanges would remain on pause indefinitely. Some prominent names trading on the NYSE include Cian (NYSE:CIAN), Mechel (NYSE:MTL) and Mobile TeleSystems (NYSE:MBT). The Nasdaq has continued its trading halts on Russian stocks as well.
It’s also worth noting that trading halts are still in place for Russian companies that trade over-the-counter. These include names like Sberbank (OTCMKTS:SBRCY) and Gazprom (OTCMKTS:OGZPY). Trading for the over-the-counter market was halted by the Financial Industry Regulatory Authority (FINRA) on March 3. Russia’s action today hasn’t moved U.S. regulators to reconsider their positions. In short, there’s no way for international investors to trade Russian stocks right now.
The Bigger Picture
In a statement issued this morning, the White House accused Russia of “propping up the shares of companies” through artificial measures. If this is true, the momentum generated by the reopening won’t last long.
Even so, many eyes remain on Russia’s markets as exchanges resume activity. Investors want to know how the country’s economy will perform under further sanctions. Russian President Vladimir Putin has stated that Russia’s economy has “survived” the onslaught of sanctions levied against it, but the markets will really demonstrate if that is true.
Only time will tell just how sustainable Russia’s return to trading is. If the White House’s assessment is correct, these stocks will quickly begin to slump. If it is not, shares may continue to rise. However, it’s unlikely they will achieve any sustainable growth until international trading resumes.
What Comes Next
Moving forward, complications will likely ensue for Russia. U.S. regulators will not lift trading halts on Russian stocks until the recent conflict is resolved. And, unlike Russia, the U.S. has little incentive to encourage trading of Russian companies. Further, although Russian stocks are up today, the turbulence driven by Russia’s invasion of Ukraine is likely to spook many international investors even after full trading resumes.
Even as Russian stocks rise today, the NYSE and Nasdaq Composite are rising, too. Clearly, both indexes are still able to thrive without prominent Russian stocks.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
