Several Russian stocks are in the spotlight on news that the country’s market has resumed trading today.
Stocks of leading Russian companies such as Sberbank (OTCMKTS:SBRCY), Gazprom (OTCMKTS:OGZPY) and Lukoil (OTCMKTS:LUKOY) were trending in the U.S. today. These tickers trade over the counter, and represent the American Depositary Receipts (ADRs) of the Russian companies.
However, while these stocks may be trending on message boards and on Yahoo Finance, investors cannot actually trade them. Despite the Russian stock market reopening, these over-the-counter tickers are still under trading halts. The Financial Industry Regulatory Authority (FINRA) halted trading in these tickers on March 3.
Investors should note that the actual reopening of the Russian stock market also comes with caveats. It has reopened with a ban on short selling as well as limits that keep foreign investors from selling their shares.
What Happened With Russian Stocks
The Moscow Stock Exchange resumed trading in 33 Russian equities today, and the MOEX Russia Index finished trading up 4.37%. Moscow-listed shares of Lukoil jumped 12% in its first day of trading since late February.
Investors should note that the Moscow Stock Exchange has been closed since Feb. 25. Its shares started to plunge after its invasion of Ukraine and resulting sanctions. The country has already reopened its bond market and kicked off stock trading again today.
Why It Matters
The reopening of the Russian market is being watched closely. Why? Investors see it as a test of how Russian financial markets, and, more broadly, the Russian economy will perform in the wake of economic sanctions. In an official statement, the White House described the reopening as a “charade.” The statement further said:
“This is not a real market and not a sustainable model—which only underscores Russia’s isolation from the global financial system. The United States and our allies and partners will continue taking action to further isolate Russia from the international economic order as long it continues its brutal war against Ukraine.”
Russian stocks are again trading in Moscow. However, the market is being tightly controlled by Russian regulators and there are strict controls being placed on foreign investors. For individual U.S. investors, ongoing trading halts also limit opportunities for direct action.
On the date of publication, Joel Baglole did not have (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.