One in 10 foreign investors leave Moscow Exchange following US sanctions
Following the United States' sanctions against the Moscow Exchange, investors from "friendly" countries began actively selling Russian shares.
Source: The Moscow Times, citing data from the Central Bank of the Russian Federation
Details: According to this year’s Q2 statistics, assets in non-resident accounts with Russian brokers fell by 9.6%, or over RUB 189 billion (approx. US$1.9 billion) – up to RUB 1.77 trillion (approx. US$18.3 billion).
A significant decline in assets occurs on the accounts of brokers' clients from international offshore zones (Virgin Islands, Panama and Belize), as well as in the countries that neighbour Russia. Thus, customer assets in Azerbaijan declined by 65% (to RUB 0.5 billion), Uzbekistan by 30% (to RUB 59.7 billion), and Kazakhstan by 20% (to RUB 185.8 billion).
The last time foreign investors lowered their interests in Russian assets was in the third quarter of 2022. At that moment, these interests decreased to RUB 0.5 trillion (approx. US$5.1 billion) due to Western sanctions and stock market volatility.
However, following that, investments increased. According to the findings of the six quarters ended 31 March 2024, the Moscow Exchange index increased by 70%, reaching 3333 points. In the second quarter, a correction began, and the index fell by 5.5% to 3154 points.
The withdrawal of foreign broker clients will be reflected in the third-quarter figures to the full extent, as the US Treasury extended the licences required to deal with Moscow Exchange until 12 October.
Background:
- The Moscow Exchange will shortly withdraw from the shareholders of Kazakhstan Stock Exchange (KASE).
- On 13 June, shares of the Moscow Exchange fell 15% following the introduction of US sanctions.
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