Russian stocks have recorded frenzied volume in the first few trading days of 2023.
On the Moscow Exchange, trading volume since markets re-opened for the year on January 4 has now well exceeded 1 quadrillion rubles – more than the whole of 2022.
Pavel Iakhomov, a supervising analyst at the SBP exchange says investor confidence is returning to the market, noting Russian stocks were soaring in January 2022 prior to the breakout of conflict in Ukraine.
“I think that for now we can definitely anticipate some more favorable developments in the Russian market situation, compared to what we saw in 2022,” he told RBC television on Monday.
He added Russian inflation data and 4th quarter company earnings, due in the next few weeks will be critical for the broader outlook for Russian stocks in 2023.
Russian stocks benefit from release of previously frozen assets
However, renewed confidence amongst domestic investors may not be the only reason for the recent surge in trading volume.
In recent weeks there’s been a major liquidity injection in Russian markets after the Luxembourg Ministry of Finance became one of the first Government bodies to allow the release of Russian assets, which were frozen following the invasion of Ukraine in February 2022.
The ministry unfroze what is estimated to be up to US$4.6 billion held in international central securities depository, Clearstream.
Russian market researcher, Anna Shebanova says the broker capital is mostly flowing back into the Moscow and Saint Petersburg exchanges at the request of investors, despite ongoing uncertainty surrounding the Ukraine conflict and tensions with the West.
“The European depositories froze mostly the money of private investors – ordinary Russians who believed in the stock market,” she said.
“There are about 23 million private financial investors in Russia now. Every seventh inhabitant invests free funds in the financial market.”
Shebanova notes frozen Russian equities assets held by European banks have generated big profits for holding financial institutions, as dividends are still being paid.
“The income from the securities, in particular dividends, are received not by the Russians, but by the European financiers.
“Euroclear (a Belgian international central securities depository) alone has earned €340 million on Russian assets till early October. This is half of all investment income of Belgian financiers.”
Last year, Asia Markets examined Russian stocks, including Gazprom (MCX: GAZP), Moscow Exchange (MCX: MOEX) and Ozon Holdings (NASDAQ: OZON). Read the article here.
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