The Moscow Stock Exchange ended 2021 on a high note, with money and investors aplenty, but Russia’s invasion of Ukraine caused an unprecedented crash and shutdown that leaves many ordinary Russians in the lurch.
On the morning of February 24, the stock market opened as usual but the world had changed. During the night, Russian troops had entered Ukraine.
The Moex index plummeted 33%, with almost US$190 billion evaporating in a single day.
On February 25, the stock market decided to close most of its activities, a closure that will last until at least March 21.
Since then the assets of the Russians — who had invested heavily in the stock market in recent years in hopes of enriching themselves — have been frozen.
“I feel totally frustrated. I don’t know what to do,” said Anna Mechtchanova, a 30-year-old graphic designer. She started investing three years ago after discovering a financial blog.
“I thought it was very important to have a financial ‘airbag’ and a good pension, since there is no certainty that the State will provide a good amount of money in old age,” he recalls.
During the pandemic, he invested mainly in Russian and American stocks about 10,000 rubles a month (about $90 today, $150 then).
But now he considers that his money is “already lost”. When the stock market reopens, he estimates his loss at $4,500.
2021, year of prosperity
Russian stock exchanges and banks had been working to attract individuals for years, with apps, podcasts, and financial blogs.
“In 2021, we recorded a huge influx of individuals to the stock market, both on the Moscow stock exchange and on the St. Petersburg stock exchange. This trend started already in 2019, when brokers simplified the procedure for investors,” says Alexander Saiganov, head of research at Invest Heroes.
The number of individual investors in Russia grew from between two and three million in 2018 to more than 15 million in 2021.
In 2021, the Moscow Stock Exchange, by far the largest in the country, was buoyed by the post-pandemic recovery and reached record levels of investment, with six IPOs, the first in years.
However, as of October, the geopolitical turmoil, a prelude to the conflict in Ukraine, began to affect the assets.
Despite this, the Moscow Stock Exchange presented new services at the end of 2021 with the aim of reaching 25 million retail investors by 2022.
“We are not just a stock exchange, but a technology company,” said Igor Maritch, Director of Sales and Development.
2022, black year
“Until February 24 of this year, I was sure that the money kept in the bank or in an investment account would always be there, that it would always help me. But I was wrong”, regrets Anna Mechtchanova.
“I understand that now I am completely unprotected. The only thing left for me is to keep at least some cash in foreign currency,” she indicates.
Analyst Alexander Saiganov remains optimistic and believes that “the Russian market will survive” as a “way to keep savings in rubles to protect against inflation”, which exceeded 9% year-on-year in February and is expected to skyrocket in the coming months. months.
The reopening of the stock market, probably on a staggered basis, at the earliest on Monday, now depends on central bank clearance.
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
